Billionaire investor Warren Buffett, who is also the largest shareholder of Kraft Foods Inc. (KFT), on Thursday reportedly criticized the company's proposed $19.6 billion acquisition of Cadbury plc (CBY,CBRY.L). He also said he opposes President Barack Obama's proposed levy on financial institutions because firms including Goldman Sachs Group Inc. (GS) and Wells Fargo & Co. (WFC) have already repaid bailout funds. In an interview with CNBC, Buffett reportedly said that the bid by Kraft for Cadbury made him "feel poorer" and said he would vote against the bid if he could. He questioned how Kraft's chief executive Irene Rosenfeld chose to pay for the deal, saying Kraft is overpaying for Cadbury as it is using its undervalued stock to fund part of the deal.
"If I had a chance to vote on it, I'd vote no, but I don't have a chance, " Buffett reportedly said.
He however expressed confidence in Rosenfeld, saying she has "done a good job in operations." Buffett said, "I think she's a decent person. She could be a trustee under my will. I just don't want her making this particular deal."
Buffett's comments came a day after Cadbury's board recommended its shareholders accept the terms of the final Kraft offer, that values each Cadbury share at 840 pence per share.
Under the terms of the final offer, Cadbury securityholders will be entitled to receive, for each Cadbury share, 500 pence in cash and 0.1874 new Kraft Foods shares, representing in aggregate, 840 pence per Cadbury share. Cadbury shareholders would also be entitled to 10 pence per share as special dividend, following the date on which the final offer becomes or is declared unconditional.
Kraft believes that the final offer is compelling opportunity for Cadbury shareholders, as it will enable them to receive 60% of their consideration in cash and will create a long-term value through a continued shareholding in the combined Group. In early January, Kraft said it agreed to sell the assets of its North American pizza business to Nestle (NSRGY.PK,NSTR.L) for US$3.7 billion, and to use the funds to increase the cash portion of its offer for Cadbury by an estimated 60 pence per share. Buffett said Wednesday that Kraft sold the business at too low a price and added that while Kraft's shares are undervalued, they are not as valuable without the pizza business.
Asked whether he plans to sell his over 9% stake in Kraft, Buffett reportedly said, "That gets expensive. Well, if I don't like what's going on in government, it doesn't mean I have to leave the country either."
In early January, Buffett's Berkshire Hathaway Inc. (BRKA, BRKB) had said it voted "no" on Kraft Foods' proposal to authorize the issuance of up to 370 million shares to facilitate the acquisition of Cadbury, as it believed that the Kraft share is a very expensive "currency" to be used in an acquisition.
Buffett also reportedly said that shares of Berkshire are also undervalued. He said his critisicm of Kraft's bid for Cadbury did not apply to his plan to use Berkshire stock to fund part of the takoever of railroad operator Burlington Northern Santa Fe Corp (BNI). He said he still does not like the idea of stock splits and issuing new shares, but feels it is necessary for the Burlington deal, which will bring a "great long-term asset" to Berkshire.
"We are giving up something that I don't like to give up in which I think is somewhat underpriced. So it's costing us a little more. On the other hand, we already own 22.6% which we bought for cash. We gave the minimum amount of stock we can do in this. We're getting $22 billion deployed in cash that I like overall. But it was a very, very close thing. If we had to give any more stock, we wouldn't have done the deal, " Buffett said.
Berkshire is paying $26 billion for the 77.4% of the Forth Worth, Texas-based railroad it doesn't already own, the largest takeover in Buffett's four decades at Berkshire.
Buffett also told that the proposed 50-for-1 stock split of Berkshire Hathaway's Class B shares was a "simple" decision to make because it will facilitate Berkshire's planned acquisition of Burlington Northern Santa Fe. According to him, the split "makes sense" and he's confident he has the votes to win shareholder approval of the move. The split will reduce the number of partial shares Berkshire needs to issue to holders of Burlington stock. Berkshire said Wednesday that its shareholders approved amendments to the company's certificate of incorporation that provide for a 50-for-1 split of its class B common stock. As a result, each existing outstanding share of class B common stock will be exchanged for fifty shares of new class B common stock. Berkshire's class A common stock is not being split.
Asked about the announcement on Tuesday by Korean steelmaker POSCO that Buffett told its CEO he will raise Berkshire's stake in the company, Buffett said he has no immediate plans to buy more shares. In a separate interview with Bloomberg Television, also on Wednesday, Buffett said he opposes President Obama's proposed levy on financial institutions as companies including Goldman Sachs Group Inc. (GS) and Wells Fargo & Co. (WFC) already repaid bailout funds. "I don't see any reason why they should be paying a special tax. Most of the banks didn't need to be saved, including Wells Fargo," Buffett is quoted as having said.
President Obama had announced a plan last week to impose a fee on as many as 50 financial companies to recover losses from the federal government's Troubled Asset Relief Program, or TARP. The levy would apply to firms with more than $50 billion in assets, including Wells Fargo and Goldman Sachs, two companies that Berkshire has investments in.
Buffett agreed to invest $5 billion in Goldman Sachs in September 2008 during the height of the financial crisis. Since then, the bank has come under severe criticism for its role in the financial crisis and the huge bonuses that it plans to pay many of its employees.
Blankfein, Goldman Sachs' chief executive, was among the bank executives who testified last week to a panel created by Congress to examine the causes of the economic collapse that roiled global markets.
Buffett remains a strong supporter of Blankfein. "I don't think anybody could have done a better job at Goldman Sachs than Lloyd Blankfein," he reportedly told Bloomberg News. "I give him enormous credit for how he's run Goldman. You've got to expect vilification of banks."
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December 26, 2025 08:42 ET Third quarter economic growth data from some major economies including the U.S. were the main news in this holiday shortened week. GDP growth and industrial production data from the U.S. helped to boost morale, while the consumer confidence survey results were less upbeat. In Europe, the quarterly economic growth data from the U.K. drew attention, while the minutes of the Australian central bank’s latest policy session was in focus in Asia.