Will Berkshire Hathaway Acquire General Mills?

It has been a while since Berkshire Hathaway (NYSE:BRK.A) (BRK.B) made a major acquisition. As a result, its cash pile has steadily grown and has thus recently exceeded the $100 B threshold. Therefore, it is only natural to wonder what the next takeover target of Warren Buffett will be. While the market is at an all-time high, with most stocks fully valued or overvalued, General Mills (GIS) is an outlier, as it is one of the extremely few stalwarts that has a reasonable valuation. Therefore, in this article I will analyze whether Berkshire is likely to acquire General Mills, either on its own or, more likely, via its major holding, Kraft Heinz (KHC).

First of all, Kraft Heinz attempted to acquire Unilever (UL) in the beginning of the year but its attempt failed. Since then, there have been plenty of rumors for the next takeover target of Kraft Heinz. The list of candidates includes some stalwarts of the food & beverage category, such as Pepsico (PEP), Mondelez (MDLZ) and General Mills. For instance, General Mills enjoyed a rumor rally five months ago, though the rumor has not proven correct so far.


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