Kraft Heinz falls after second-largest shareholder 3G Capital sells more than 25 million shares

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Berkshire Hathaway Chairman Warren Buffett seen at the annual Berkshire shareholder shopping day in Omaha, Nebraska, U.S., May 3, 2019.

Scott Morgan | Reuters

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The second-largest investor in Kraft Heinz Company disclosed that it has again trimmed its stake in the food company.

3G Capital Partners, the Brazilian private equity giant founded by Jorge Paulo Lemann, disclosed that it sold 25.1 million shares at a price of $28.44 per share, bring its stake down about 9% to 245 million shares.

The private equity firm is the company’s second largest shareholder after Warren Buffett’s Berkshire Hathaway.

After the sale, 3G Capital still has 20% ownership of Kraft Heinz. The stock fell 2.3% in premarket trading Tuesday. Kraft Heinz did not immediately respond to CNBC’s request for comment.

The latest sale comes amid a string of brand write-downs and financial woes at Kraft Heinz.

The stock crated nearly 25% in February after it wrote down $15.4 billion on two of its most iconic brands, Kraft and Oscar Mayer. It also cut its dividend by 36% to 40 cents at the time and announced it had received a subpoena from the Securities and Exchange Commission on its accounting policies and internal mechanics in 2018.

Last month, it sank to a new all-time low after it again delayed the filing of its financial results and wrote down the value of its business by an additional $1.22 billion.

The struggling performance also represent a rare loss for the bargain-hunting Buffett and Berkshire.

Shares of Kraft Heinz hit a record low on Aug. 28 and remain down more than 31% in 2019. By early August, Berkshire had lost almost $5 billion this year on its investment in the packaged food company.

The losses also highlight the reputation of 3G Capital, known on Wall Street for scaling back costs at the companies it invests in or acquires through layoffs, management replacement and other changes. The firm bought Heinz in 2013 and later merged the company with Kraft in 2015.

3G Capital reported a similar sale in August 2018, when it sold 20.6 million shares at a price of $59.85.

Despite speculation that tensions were mounting between the so-called Oracle of Omaha and 3G Capital, Buffett told CNBC in June that such reports were wrong and that Lemann remained “a good friend.” 

“I made a mistake in the Kraft purchase in terms of paying too much,” Buffett said at the time, adding that the write-down of the Kraft and Oscar Meyer brands was an acknowledgement of that.

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