Berkshire acquires Heinz for 72.5 p/s

[gfp]

It also looks like Berkshire might have a ~$12 Billion write up on the transaction, if current KRFT prices minus 16.50 is approximately the post special dividend share price.  I get around $8 Billion in combined adjusted EBITDA with their conservative projected initial synergies, cost savings - on an $81 Billion market cap.  Then the 3G team gets to work plugging Kraft brands into the HNZ international network and Kraft brands into the HNZ foodservice machine.  I'm sure there is plenty to do.

[Liberty]

http://www.bloomberg.com/news/articles/2015-07-06/buffett-s-kraft-heinz-bet-valued-at-24-billion-in-debut

[Mephistopheles]

So doing some back of the envelope math here:

 

Berkshire owns 55.36% of Heinz for $4.25 billion + $5.536 billion for the special dividend. Now it's 55.36% of 51% of the new company, so 28.23% of 1.217 billion KHC shares, or 343,559,100 shares. At $72.40 that's roughly $25 billion, or a $15 billion write up from the original investment.

 

Add $15 billion to $241 billion book value to get $256 billion. At $335 billion market cap that's 1.3x book value. So, BRK is a buy right now.

[ourkid8]

I recently added 50% to my BRK-B holdings and If it continues trending down, I will add more aggressively. 

 

So doing some back of the envelope math here:

 

Berkshire owns 55.36% of Kraft for $4.25 billion + $5.536 billion for the special dividend. Now it's 55.36% of 51% of the new company, so 28.23% of 1.217 billion KHC shares, or 343,559,100 shares. At $72.40 that's roughly $25 billion, or a $15 billion write up from the original investment.

 

Add $15 billion to $241 billion book value to get $256 billion. At $335 billion market cap that's 1.3x book value. So, BRK is a buy right now.

[original mungerville]

So doing some back of the envelope math here:

 

Berkshire owns 55.36% of Heinz for $4.25 billion + $5.536 billion for the special dividend. Now it's 55.36% of 51% of the new company, so 28.23% of 1.217 billion KHC shares, or 343,559,100 shares. At $72.40 that's roughly $25 billion, or a $15 billion write up from the original investment.

 

Add $15 billion to $241 billion book value to get $256 billion. At $335 billion market cap that's 1.3x book value. So, BRK is a buy right now.

 

The write-up of $15 billion would be reduced by a tax liability equal to the percentage tax rate multiplied by $15 billion. So call that around a $12 billion increase in book value (rather than $15 billion).

[Mephistopheles]

So doing some back of the envelope math here:

 

Berkshire owns 55.36% of Heinz for $4.25 billion + $5.536 billion for the special dividend. Now it's 55.36% of 51% of the new company, so 28.23% of 1.217 billion KHC shares, or 343,559,100 shares. At $72.40 that's roughly $25 billion, or a $15 billion write up from the original investment.

 

Add $15 billion to $241 billion book value to get $256 billion. At $335 billion market cap that's 1.3x book value. So, BRK is a buy right now.

 

The write-up of $15 billion would be reduced by a tax liability equal to the percentage tax rate multiplied by $15 billion. So call that around a $12 billion increase in book value (rather than $15 billion).

 

Oh yes of course, thanks for the correction! :)