Greg Abel's Opening Play: Berkshire's Potential Exit From Kraft Heinz Signals Strategic Shift

Greg Abel, Berkshire Hathaway’s newly appointed CEO, appears poised to make his first significant portfolio decision by reconsidering the conglomerate’s substantial stake in Kraft Heinz. This potential move would represent a watershed moment—marking the possible end of Warren Buffett’s iconic investment in the food manufacturing giant that he helped create through a bold 2015 partnership with 3G Capital.

Currently, Berkshire holds a commanding 27.5% ownership stake in Kraft Heinz, valued at $8.6 billion as of September 2025, positioning the conglomerate as the company’s largest shareholder. The timing of this potential exit is particularly noteworthy, coming shortly after Abel assumed leadership and amid significant corporate restructuring on Kraft Heinz’s side.

Kraft Heinz: From Buffett’s Crown Jewel to Potential Portfolio Exit

When Buffett and 3G Capital orchestrated the 2015 merger that united Kraft Foods and H.J. Heinz into a single powerhouse, the transaction represented one of the most celebrated strategic combinations in food industry history. The investment exemplified Berkshire’s core investment thesis—seeking businesses with enduring earnings capacity, robust returns on equity, conservative leverage, and capable management teams acquired at reasonable valuations.

However, the investment’s trajectory has become increasingly complex. In May 2025, Kraft Heinz announced it was evaluating potential strategic transactions, prompting Berkshire to take a significant charge against its holdings. The conglomerate wrote down $3.76 billion against its Kraft Heinz position, reflecting the uncertainty surrounding the food company’s strategic direction and market dynamics.

Just months later, Kraft Heinz moved forward with a transformative restructuring plan. Last fall, the company announced plans to separate into two independent, publicly traded entities through a tax-free spin-off mechanism—a move designed to sharpen strategic focus and reduce operational complexity. This corporate separation appears to have triggered internal discussions at Berkshire about the optimal timing and rationale for potentially liquidating its substantial position.

The Spin-off Catalyst: Why Now Is the Time for Berkshire’s Reassessment

The planned separation of Kraft Heinz provides a natural inflection point for Berkshire to reconsider its investment thesis. If the spin-off proceeds as planned, Berkshire’s 27.5% stake would be distributed across two distinct entities, complicating portfolio management and potentially misaligning with the conglomerate’s investment criteria.

Abel’s consideration of an exit reflects a pragmatic assessment: maintaining oversized stakes in complex corporate structures may not align with Berkshire’s long-standing philosophy of holding high-quality businesses for extended periods. By exiting before or during the spin-off process, Berkshire could crystallize liquidity from an investment that, while substantial, has underperformed expectations relative to alternatives.

This decision would contrast sharply with Buffett’s historical tendency to maintain conviction stakes through extended holding periods. Yet it also signals Abel’s willingness to make independent strategic choices unconstrained by legacy decisions—a critical transition for Berkshire’s next generation of leadership.

Diverging Strategies: How Berkshire’s Approach Contrasts With Competitors

While Berkshire contemplates its Kraft Heinz position, comparable conglomerates are pursuing markedly different acquisition and portfolio strategies.

Progressive Corporation [PGR] has built its growth engine through disciplined, selective acquisitions designed to build operational scale, enhance technology capabilities, and expand distribution channels. Progressive’s dealmaking reinforces its core insurance underwriting strengths while maintaining strategic selectivity—acquiring only entities that deliver measurable competitive advantages in specific geographies or customer segments.

Travelers Companies [TRV] operates within a similarly disciplined framework, emphasizing carefully vetted acquisitions that expand underwriting competencies, upgrade technology infrastructure, and broaden market reach. Travelers prioritizes sustainable shareholder value creation through conservative balance sheet management and targeted investments in complementary capabilities—a philosophy that aligns closely with Berkshire’s historical approach.

Yet Berkshire’s potential Kraft Heinz exit reveals a subtle but important distinction: while competitors use acquisitions to build concentrated strength in core domains, Berkshire is pruning investments that have become strategically misaligned. This reflects Abel’s mandate to maintain portfolio coherence—ensuring Berkshire’s $1+ trillion asset base remains focused on highest-conviction opportunities.

Valuation Backdrop: Is BRK.B’s Market Multiple Justified?

Over the past 12 months through early 2026, Berkshire Hathaway shares [BRK.B] have appreciated 1.8%, outperforming broader market indices though modestly. The stock currently trades at a price-to-book ratio of 1.49, meaningfully above the industry peer average of 1.42—reflecting market confidence in management execution and portfolio quality despite recent portfolio adjustments.

However, the premium valuation carries implicit expectations. Berkshire’s Value Score of C suggests the market sees moderate value at current prices, indicating limited downside protection if earnings disappoint or portfolio performance deteriorates. This valuation context underscores why portfolio optimization—including potential exits like Kraft Heinz—has become increasingly important to maintain investor confidence.

2026 Outlook: Earnings Expectations and Investment Implications

Consensus estimates for Berkshire’s 2026 performance present a mixed picture. While revenue expectations point toward year-over-year expansion, EPS projections suggest modest earnings pressure in the coming quarters. First-quarter 2026 consensus estimates have remained stable across recent trading sessions, though full-year 2026 EPS expectations have moved 22% higher over the same period—signaling analyst confidence in the company’s ability to navigate current challenges.

These divergent signals highlight the strategic importance of Abel’s capital allocation decisions. A successful Kraft Heinz exit executed at attractive valuations could accelerate 2026 earnings per share and provide dry powder for higher-return deployment opportunities.

Berkshire’s investment portfolio extends beyond Kraft Heinz, encompassing significant positions in Occidental Petroleum and Berkadia—holdings that have collectively strengthened the conglomerate’s cash generation profile and income diversification. By strategically pruning lower-conviction positions while maintaining exposure to resilient, cash-generative businesses, Berkshire under Abel’s leadership can maintain its competitive edge across evolving market conditions.

The conglomerate currently carries a Zacks Rank of #4 (Sell), reflecting analyst concerns about near-term valuation and earnings trajectory. Yet for long-term investors aligned with Berkshire’s patient capital philosophy, Abel’s demonstrated willingness to make tough portfolio decisions may ultimately prove reassuring—suggesting a leader committed to maintaining fiduciary discipline and capital efficiency.