OMAHA, Neb. (Reuters) - Warren Buffett on Saturday signaled his commitment to Kraft Heinz Co and defended his actions toward Wells Fargo & Co, two of the largest investments at his Berkshire Hathaway Inc, despite mistakes at both that have caused many investors to sour on them.
Buffett, 88, spoke before tens of thousands of people in Omaha, Nebraska, where the Berkshire Chairman and Chief Executive Officer and Vice Chairman Charlie Munger, 95, fielded more than 50 shareholder and analyst questions for six hours at the centerpiece of a weekend of events.
Kraft Heinz has been a thorn for Berkshire, which in February took a $3 billion writedown on its 26.7 percent stake, because of the packaged food company’s inability to keep up with changing consumer tastes and reliance on older brands such as Oscar Mayer and Jell-O.
The company was created from the 2015 merger of Kraft Foods and H.J. Heinz, the latter of which had been owned by Berkshire and Brazil’s 3G Capital, which runs Kraft Heinz day-to-day.
Buffett defended 3G’s management, saying the combined company is doing well operationally, and that its current problems cannot be blamed on a lack of investment.
But he also maintained that “we paid too much money” for Kraft.
“You can turn any investment into a bad deal by paying too much,” he said, while adding it was “not inconceivable” Berkshire could partner with 3G again on a transaction.
He said 3G had more willingness to take on leverage and “pay up,” but in many cases also had “way better operators.”
‘MISTAKES’ AT WELLS FARGO
Buffett, who became famous in 1991 for criticizing Salomon Inc’s practices and becoming interim chairman to right the mess, also faced a question about his relative silence about