facebook
twitter
rss
account
search
search
 

Buffett disapproves of Kraft, Cadbury deal

Jan. 20, 2010 at 12:44 PM   |   Comments

| License Photo
NEW YORK, Jan. 20 (UPI) -- Billionaire investor Warren Buffett said he disapproves of Kraft Food Inc.'s $19.1 billion deal to buy British chocolatier Cadbury.

In an interview, Buffet, who owns 9 percent of Kraft's stock, said he had "a lot of doubts," about the deal to which the two firms agreed earlier this week and would have voted against it if given the chance, The Financial Times reported Wednesday.

Buffet said Kraft is currently undervalued and Kraft stock traded for Cadbury stock in the deal was "very expensive currency."

Kraft said: "We respect Buffet's opinion. He's one of our largest investors."

However, "we think this is a good deal for us. It transforms our portfolio for better long term growth."

Buffet called Kraft Chairman and Chief Executive Officer Irene Rosenfeld "a good operator," but said the deal to sell its frozen pizza business to Nestle for $3.7 billion to raise cash for the Cadbury deal was struck "in an enormously tax-inefficient way."

On Wednesday, credit rating agency Fitch lowered Kraft's rating to BBB minus due to "the anticipated increase in financial leverage of the combined Kraft/Cadbury."

© 2010 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
Recommended UPI Stories
Most Popular
1
Verizon will soon let you choose what TV channels you want to pay for Verizon will soon let you choose what TV channels you want to pay for
2
Etsy bans sale of items with Redskins name, imagery Etsy bans sale of items with Redskins name, imagery
3
Meggitt receives $17.7 million Army order for target systems Meggitt receives $17.7 million Army order for target systems
4
Organic food brand at Kroger's to hit $1B in sales Organic food brand at Kroger's to hit $1B in sales
5
Lockheed Martin opens technology center
Trending News
Video
x
Feedback