Seriously, Why Did Buffett Pay So Much for H.J. Heinz Company (HNZ)?

Taking into account the new debt plus the preferred equity, I assume Berkshire will see an annual return in the high 6% to low 7% range right out of the box. In a world of sub-1% five-year Treasury yields, getting that kind of return on $12 billion in a stable, high quality company like Heinz is nothing to sneeze at. On balance, I see this as a positive for Berkshire shareholders — of which I’m one.

Now, as far as the returns that 3G Capital will be looking at … I’m admittedly scratching my head.

The article Seriously, Why Did Buffett Pay So Much for Heinz? originally appeared on Fool.com and is written by Matt Koppenheffer.

Matt Koppenheffer owns shares of Berkshire Hathaway. The Motley Fool recommends Berkshire Hathaway, H.J. Heinz Company, and Wells Fargo. The Motley Fool owns shares of Berkshire Hathaway, JPMorgan Chase, and Wells Fargo.

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