Warren Buffett. AP Images Berkshire Hathaway's latest big deal is quite a mouthful

Warren Buffett says he likes to buy companies that are easy to understand and are performing well.

His latest deal, the $50 billion acquisition of Kraft Foods that was announced on March 25th, passes only one of those tests.

Most people can get their heads around the slices of processed cheese and hot dogs that Kraft churns out--indeed Mr Buffett, known to favour plain fare, would probably like to get his lips round them, too.

But as a business, Kraft is a bit of a mess.

Last year its revenues were stagnant and its volumes and profits fell. Its chief executive left in December. It generates 98.5% of its sales in the mature markets of America and Canada, where, the suspicion is, a new generation of healthier eaters no longer aches to scoff a Kraft Macaroni & Cheese, followed by a plate of Jello and washed down by a Capri Sun drink.

Kraft's predicament is in large part a result of its turbulent ownership over three decades, in turn a testament to the hyperactivity of Wall Street's dealmakers. It has been the subject of seven big mergers or spin-offs since 1980, including an unhappy spell under the ownership of Philip Morris, a tobacco firm, between 1988 and 2007. Most recently Kraft was separated from its global snack brands in 2012, which were renamed Mondelez International.

Reflecting Kraft's troubled past and iffy present performance, Mr Buffett is not buying it alone, nor managing it. Instead he is working with 3G Capital, a buy-out firm with Brazilian roots which is the closest thing the consumer-goods industry has to a miracle-worker.

In 2013 Berkshire Hathaway, Mr Buffett's investment vehicle, teamed up with 3G to buy Heinz, another food company, with each taking 50%.

The new deal builds on this structure: aided by a capital injection from its owners, Heinz will purchase Kraft. Once the deal closes Berkshire and 3G should each own about 25% of the combined firm and the rest will be in the hands of outside shareholders. Heinz's top brass will run it, and its chairman will be Alex Behring, a founder of 3G.

The buy-out firm has experience of corporate orphans--another big investment is Burger King, which had flipped ownership four times in less than two decades.

What 3G really excels at, though, is cost cutting, guided by the philosophy of "zero-based budgeting": every dollar of expense must continually be questioned, from corporate jets to photocopying bills.

3G was behind the creation of Anheuser-Busch InBev, the world's biggest brewer, that has industry-leading margins. Since 3G has run Heinz, its gross operating margins have risen by eight percentage points.

Mr Buffett and 3G are paying top dollar for Kraft. Based on last year's underlying profit figure, the deal will generate a miserly 4% post-tax return on capital.

Were Kraft to enjoy the same margin uplift that Heinz has, this would rise to 6%--still subpar. So, to make the numbers work, Kraft will also have to expand its sales, preferably outside America. The plan is to use Heinz's international footprint (it generates over half its sales abroad) to help Kraft's all-American brands go global.

Investors concluded that all this makes sense: Kraft's shares rose by 36% on the day of the announcement. And yet this latest giant deal raises two uncomfortable questions.

One is that it has all been tried before. In 2004 Kraft launched a "one company" initiative, with the aim of creating a huge and globally integrated firm with lower costs, only to do a U-turn seven years later, to focus instead on creating nimble niche businesses.

Perhaps now, after decades of strategic indecision, the global approach will work under stable ownership--Mr Buffett promises Berkshire will hold its Kraft stake "forever".

Berkshire Hathaway's Warren Buffett. AP Images Yet it is Mr Buffett's own role that raises the second question. With an enterprise value of $110 billion, Heinz-Kraft will be one of the biggest businesses in which Berkshire Hathaway has a significant stake. Its holdings in the group, including preferred stock, will be worth about $30 billion, equivalent to roughly a tenth of Berkshire's market value.

It is unclear how control of this huge investment will be split between 3G and Berkshire, a question given saliency by the fact that Mr Buffett, aged 84, cannot go on leading his company forever. It may end up being a matter for his as-yet-unnamed successor to grapple with.

There is another solution, of course. If Mr Buffett admires 3G and its founders so much, perhaps he should consider asking them to run Berkshire itself.

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