Warren Buffett is apparently hungry for another takeover and Bloomberg suggests that the Oracle of Omaha may take a run at General Mills.
The 83-year-old chairman of Berkshire Hathaway told shareholders at his company's annual meeting on May 3 that he’s interested in another large deal. The story suggests that food companies Kellogg, Kraft Foods and Golden-Valley based General Mills may fit the bill of what he's looking for. Each is valued at more than $20 billion before debt and a takeover premium.
Buffett, the world’s third-richest man, told shareholders that he and business partner Charles Munger, 90, are focused on acquiring large companies to create “more enduring” value. He also said that Berkshire is “very likely to partner” with New York-based buyout firm 3G Capital on another deal, “perhaps on some things that are very large.” Last year Buffet teamed with 3G Capital to acquire ketchup maker H.J. Heinz Co.
Buffett has said that he prefers “simple” businesses that he understands and that have “good” returns on equity with consistent earnings power. Food companies like those mentioned fit the bill, said Brian Yarbrough, a consumer stock analyst for Edward Jones.
Representatives for Kellogg, Kraft Foods and General Mills have all said that their companies don’t comment on speculation.
"It's all speculation, of course," according to the Minneapolis-St. Paul Business Journal in its report on the story. "Berkshire isn't commenting and the prospective targets certainly aren't. Analysts note that if General Mills were bought, a more likely suitor would be Nestle, with whom it's worked before. Kraft seemed the more likely match for a company that just bought Heinz."