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The Kraft Heinz Merger: Where Are Share Prices Headed?

The Kraft Foods Group (NASDAQ: KRFT) recently announced its merger with food company H.J. Heinz Co which is jointly owned by 3G Capital Inc. and Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B). The giant new company will be called the Kraft Heinz Company and will be among the world's top 5 largest food companies. Kraft's share prices have shot up immensely since the announcement of the completion of the merger and the company's shares are now trading at an all-time high of $90.70. Investors are thus confident of the growth prospects of the new company going forward and are surely expecting tremendous positive synergies. The merger between Kraft and Heinz represents the largest deal since the financial crisis, amounting to almost $35 billion. It is definitely a huge step for Kraft towards becoming the world's number one food company as the boost for the company's revenues as well as earnings resulting from the merger is expected to be immense. Kraft has seen steady top line growth over the course of the last few years but bottom line growth has seen fluctuations especially in FY 2014 when net incomes fell to less than half of that in FY 2013. The synergies from the merger will boost all business segments for Kraft and will surely result in an upside for the company's share prices as shown by the incredible boost that share prices recently saw. Read more