Two Elephants Buffett Would Like: Kellogg Company (K), Campbell Soup Company (CPB)

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The path ahead

As Kellogg Company (NYSE:K)’s CEO stressed in its most recent conference call with investors, Heinz’s recent deal gives profound food for thought. Buffett and 3G Capital are not “dumb money” chasing expensive deals. They have seen relevant potential synergies and a big opportunity at the ketchup company they recently bought. They paid a premium to own a business they can make more valuable. Similar opportunities must also exist at Campbell Soup Company (NYSE:CPB) and Kellogg. Heinz, Campbell and Kellogg are companies with strong similarities. Specifically, Campbell and Kellogg Company (NYSE:K) have a lot of room to improve and they both sell at a discount to peers. Maybe some deep pocketed investor will decide to go all in. After all, mimicking Warren Buffett and Mr. Lemann (3G’s main investor), should not be a bad idea.

The article Two Elephants Buffett Would Like originally appeared on Fool.com and is written by Federico Zaldua.

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