Feb 14 - Rob Cox talks with Breakingviews columnists about the rationale and structure of the $28 billion takeover of Heinz by private equity firm 3G Capital and Warren Buffett's Berkshire Hathaway.
▲ Hide Transcript
▶ View Transcript
Big deal in the -- space the biggest deal you could ever have an economist space probably. At 28 billion dollar takeover of -- by Warren Buffett and his new Brazilian friend's three G private equity group. What's going on it's like mustard is mixed in with the catch up. On top of the burger here I mean you don't usually see private equity and their -- side with with one but. Put them in the -- and we -- -- without slamming these big deals we have one private equity are teaming up -- and pressure that people deep -- and it was here as well. And Warren Buffett is in that position for starters and just at a lot of cash needs to do something that he said he was at 5050 if it's twentieth doing an equity. But Berkshire also trying in about eight going out her stock right so they say he's he's gonna -- is actually yet. Its debts at the -- it is nice to eat at the twenty billion dollar equity tech is that right that they're they're splitting. OK but what purchased. OK so all right all right I got it. So what what what the three -- guys bring table. And I think you know again I think it's a fit for their other holdings and they have Burger King. That kind of good -- trusted I don't I think that I'm pretty sure -- -- hurricane diocese I was -- -- -- -- that owns ovals on the board of -- Indian. -- my senses and it away its cover for Warren Buffett to bring in a different management approach to -- and if you think about it. You that I'm not sure what the upside for -- as a means that while the couple of others but you can squeezed. Pardon the pun that you could squeeze the profits. All the there's also an -- emerging market theory here right -- and expand I mean obviously -- has -- -- -- states. Big -- of consumers here. But they're trying to push them both -- and other stuff -- further abroad presumably these guys from Brazil have some good sense of how to do that the government here. On how to hit the emerging markets and open up there and immediate there may be something. But ultimately though aren't they can get out of it -- mean if they're private equity firm that maybe I mean I don't know what they're there stuff you'd say but I but you would expect unlike say Berkshire Hathaway. They would be more active so. I mean does Warren -- then by the grass stores today. I mean what's the play it right at and that. Well -- have that built -- on a very structured but it seems like a natural. Exit eventually it's at least one already sort of available exit too bad news for offered to buy the rest of it in five years. That so they have a way put options a question asked if there was. And -- are right now who everyone on Wall Street got a piece of the steel what was the instinct -- follows the trend we've seen two boutiques one on each side with a -- have all that not to speak but an independent advisors. They interview stirred up close relationship with three G right Sadr viewed Blair have front he's been working with Heinz forever -- -- like. Debt and you've got one -- practically sighed in JPMorgan on one side while our Internet that half the -- advise if there was just so happens to be a core holding of Warren Buffett I think they got on the ticket. All right well thanks a lot guys we'll be back for more breaking news tomorrow.