Morningstar

Who Will Kraft Heinz Woo Next?

While the narrow-moat firm abandoned its bid for wide-moat Unilever, we doubt its interest in consolidating the space has subsided.

Securities In This Article
The Kraft Heinz Co
(KHC)
Mondelez International Inc Class A
(MDLZ)

A few short days after its interest in wide-moat

In accordance with the U.K. takeover code, Kraft Heinz is restricted from making another approach toward the European consumer products firm for the next six months. However, while this takeover has been thwarted, we doubt its interest in consolidating the space has subsided. It is far from clear where its intentions lie, but Kraft Heinz could opt for a partner with outsize exposure to faster-growing emerging markets (where its penetration is not robust, representing a mere 10% of total sales) and the opportunity to extract meaningful costs persists (in line with the strategic benefits a deal with Unilever stood to offer). However, we don’t expect Kraft Heinz will opt for a hostile tie-up, as evidenced by its quick decision to end its pursuit of Unilever. We’ve long thought

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About the Author

Erin Lash, CFA

Sector Director
More from Author

Erin Lash, CFA, is a sector director, AM Consumer, for Morningstar*. In addition to leading the sector team, she covers packaged food and household and personal care companies. Beyond managing a team of nine analysts and associates covering an array of consumer firms, Lash also conducts fundamental analysis of 13 multi-billion-dollar market capitalization firms in the packaged food and household and personal care space.

Before joining Morningstar in 2006, Lash spent four years as an investment analyst covering retail, transportation, and technology firms for State Farm Insurance. In this capacity, Lash analyzed financial statements, business strategy, and fundamentals of owned companies and potential investments, presenting her recommendations based on this analysis to State Farm portfolio managers for ownership consideration.

Lash holds a bachelor’s degree in finance from Bradley University’s Foster College of Business. She also holds a master’s degree in business administration, with concentrations in accounting and finance, from the University of Chicago Booth School of Business. Lash has completed the Chartered Financial Analyst® designation. She ranked second in the food and tobacco industry in The Wall Street Journal’s annual “Best on the Street” analysts survey in 2013, the last year the survey was conducted.

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

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