Reuters - Video

EDITION: U.S. | U.K. | IN

Top News

Breakingviews: Digesting Heinz deal

Wednesday, 20 Feb, 2013 - 03:38

Feb 20 - Jeffrey Goldfarb and Breakingviews columnists discuss why the $28 billion acquisition of Heinz by Berkshire Hathaway and 3G Capital could take a long time to deliver.

▲ Hide Transcript

View Transcript

We are still digesting yet when he billion dollar -- deal -- -- -- there. And and -- is how to look at it there's there's some questions we're kind of cracks in the numbers try to figure out the long term value here because there's a lot of debt involved in this deal. Warren Buffett and three G capital and you kind of look at -- there and where are they gonna make any money. One of the things to us look at this as maybe not a typical private equity where you're at its five year horizon when it was turned things around them. Panic the public -- -- thought. Whereas -- -- the Berkshire and you look at you the man behind -- is while they. Have a longer term right. But it rarely exits any any news that some investments. Executed by. When I as a business that they're -- not -- make -- -- she denies that the devils behind. -- As it now toys have been different networks took it starts when he used to build and to and also banker gets here in Brazil as well they were uninteresting people in the it's. Senate like a good track record of staying at Lowell and getting good value attitude they're they're gonna in need to do that this. Then when things have been as -- now via we're talking about six times. Leveraged writes I mean so it's gonna take on it is a couple things that they -- is cut costs this is within hours ago it -- Hide behind this sort of considered a relative not mean the budget they've they've -- cut exactly and there are along that spectrum and. I think to make this work they're gonna have to find -- do efficiencies as we. So I basically you know. And as soon like 7% cut over. Here because it's a certain amount of cost cutting proposals he's -- growth. It was a day that you're -- indicates -- we look back and intellectually grow and of -- Austin hosting an apron -- corner opposite on average. We just -- but it's an awful so we take that forward and assume a degree of cost cuts and a lot of minutes and also very international growth expansion generally I have they have they have tightened some talent with associates and -- -- -- -- below -- including a lot of them -- -- another great -- was off at seven -- one dollar and right so it's illegal -- -- about 200 -- of -- -- you know buses both of -- -- even -- -- it's -- and it's really kind of dead. Sizzle would take munitions that we -- they cut costs and keep them low is that before the next he has. And maybe if they get some of an operating efficiencies. Say 20%. So that that income was 20% of revenue. And they grow revenue by -- opposite side. Then they're getting to may be a point when it in Dublin money forget that that's over -- -- -- -- attacks have continues we've with a book as being greedy region save you cash courier 5% increase efficiency 26% which. Knowing I read nobody else. Yeah that's elements that and -- that's that's something that unless a big you know continents -- Very basic -- new market right. But that exercises basically to play with the numbers to see you how they can do and what's what about a -- businesses and a deal for everybody -- with this particular grocers like you know. Exactly I think that's particularly to -- I think there's a lot of people are looking at these deals like its back you know LBOs are back again I think. This type of deal is very specific to you there's actually there's just no way am regularly financial guarantees in his. But the -- many of them like to get a dividend -- the insults -- debt that's when your main street festivals or going into this that we can do that aren't you we'll leave it there and I will be back with more breaking news tomorrow.

Breakingviews: Digesting Heinz deal

Wednesday, 20 Feb, 2013 - 03:38

Editors' Picks »

The Exchange »

The Exchange: Hot commodity The Exchange: Hot commodity

Wed, 16 Jul, 2014 - (9:25)

The Exchange: Constitutional crusade The Exchange: Constitutional crusade

Wed, 25 Jun, 2014 - (11:35)

The Exchange: The value of money The Exchange: The value of money

Mon, 02 Jun, 2014 - (9:53)

The Exchange: China’s Second Continent The Exchange: China’s Second Continent

Tue, 27 May, 2014 - (9:35)

The Exchange: A master of business arts The Exchange: A master of business arts

Thu, 08 May, 2014 - (8:24)

The Exchange: America's bankrupt cities The Exchange: America's bankrupt cities

Mon, 05 May, 2014 - (8:52)

The Exchange: Let the rocking commence The Exchange: Let the rocking commence

Tue, 08 Apr, 2014 - (8:13)

The Exchange: The Moneyball fallacies The Exchange: The Moneyball fallacies

Mon, 24 Mar, 2014 - (9:54)

Is doing good a good business? Is doing good a good business?

Mon, 17 Mar, 2014 - (7:38)

Oddly Enough »

Snow leopard cubs make Bronx Zoo debut Snow leopard cubs make Bronx Zoo debut

Wed, 20 Aug, 2014 - (0:41)

Eco-friendly bench keeps your tech fully charged Eco-friendly bench keeps your tech fully...

Tue, 19 Aug, 2014 - (1:55)

A cheetah cub and a puppy make friends A cheetah cub and a puppy make friends

Tue, 19 Aug, 2014 - (0:48)

Bug eaters unite in Tokyo Bug eaters unite in Tokyo

Tue, 19 Aug, 2014 - (1:23)

Tango dancers put best feet forward Tango dancers put best feet forward

Tue, 19 Aug, 2014 - (1:08)

Giraffe calf checks out new surroundings Giraffe calf checks out new surroundings

Mon, 18 Aug, 2014 - (0:42)

Bolivian priest blesses beloved pups Bolivian priest blesses beloved pups

Sun, 17 Aug, 2014 - (1:25)

Gamescom opens to the public Gamescom opens to the public

Thu, 14 Aug, 2014 - (1:05)

Reuters Investigates »

Re-homing victim: "I could have been dead" Re-homing victim: "I could have been dead"

Wed, 19 Feb, 2014 - (8:24)

Cops and loggers in the Amazon rainforest Cops and loggers in the Amazon rainforest

Fri, 10 Jan, 2014 - (4:01)

"Passed around like a dog" "Passed around like a dog"

Thu, 29 Aug, 2013 - (6:32)

Adopted, then abandoned online Adopted, then abandoned online

Thu, 29 Aug, 2013 - (13:21)

How the DEA keeps its secrets secret How the DEA keeps its secrets secret

Mon, 05 Aug, 2013 - (1:36)

How education lost its role as the great equalizer - Reuters Investigates How education lost its role as the great...

Mon, 17 Dec, 2012 - (7:52)

Jihad Jane: From abused child to American jihadist - Reuters Investigates Jihad Jane: From abused child to American...

Sun, 09 Dec, 2012 - (10:01)

Jihad Jane: The order to kill - Reuters Investigates Jihad Jane: The order to kill - Reuters...

Mon, 10 Dec, 2012 - (10:39)

Moving Pictures »

"Old timers" sail the Chesapeake Bay "Old timers" sail the Chesapeake Bay

Mon, 11 Aug, 2014 - (2:27)

Burned memories Burned memories

Fri, 08 Aug, 2014 - (3:02)

Images of July Images of July

Fri, 01 Aug, 2014 - (1:20)

World Cup: passion on the pitch World Cup: passion on the pitch

Fri, 11 Jul, 2014 - (1:00)

A refugee in America gives back A refugee in America gives back

Thu, 03 Jul, 2014 - (3:25)

A long search for refuge A long search for refuge

Fri, 20 Jun, 2014 - (3:04)

World Cup: Around the globe in 50 goals World Cup: Around the globe in 50 goals

Fri, 06 Jun, 2014 - (1:08)

VIVID – Sydney’s spectacle of light VIVID – Sydney’s spectacle of light

Fri, 30 May, 2014 - (1:37)

The week that changed Boston The week that changed Boston

Mon, 14 Apr, 2014 - (3:28)