Kraft and Heinz, combined, are worth less than what the Brazilian fund 3G and Berkshire Hathaway had to pay to secure the purchase of the latter, according to El Economista.
In March 2015, 3G and Berkshire, owners of the Heinz brand, reached an agreement to buy Kraft and subsequently merge with the former for $40 billion. The deal created a group with revenues of $28 billion and a market capitalization close to $90 billion. Today, it has a market capitalization below $40 billion and revenues of $26.259 billion.
After reaching record highs in 2017, Kraft Heinz has had a difficult time on the stock market. The worst happened on February 21st of this year, when its share price fell 28% after it became known that it was being investigated by the stock market regulator.
The company's margin decreased from 27,2% in 2016 to 23,2% in 2018. In 2016, the margin was 11,1 percentage points higher than the industry average, but this difference narrowed to 6,6 percentage points.
Another problem affecting Kraft Heinz, according to analysts, is its inability to grow. In 2017, its turnover contracted by 0,9%, and in 2018 it remained practically flat. This year, a contraction of more than 1% is expected. Gross profits are expected to fall by 3%.
The merger between Kraft and Heinz created a giant in the food sector with ambitious goals. In February 2017, it made a $143 billion offer to buy Unilever. At the time, Unilever was worth $106 billion. Today, Unilever is valued at around $150 billion, almost four times more than Kraft Heinz.
