Greg Abel took over the CEO job at Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) from Warren Buffett at the start of 2026. He’s already proven to be a more proactive manager when it comes to the stocks Berkshire Hathaway owns and businesses it buys. One interesting move was his behind-the-scenes push to stop Kraft Heinz (NASDAQ: KHC) from splitting up its business. Despite the troubles Kraft Heinz has faced, Abel should still consider buying into McCormick (NYSE: MKC) and its planned acquisition.
One mistake is not a reason to avoid all consumer staples mergers
The Kraft Heinz merger was backed by Buffett, and it didn’t work out well. But there was a problem with the deal from day one. Both Kraft and Heinz were bloated companies struggling to get back on track. The entire purpose of the merger was to simply cut costs, which is fine to a point. However, the consumer staples space is driven by innovation and advertising. Kraft Heinz focused so much on cost-cutting that it stopped being an innovative company. And advertising wasn’t spared in the cost-cutting effort, either.
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Despite the less-than-desirable outcome with Kraft Heinz, Abel is pushing the company’s new leadership team to right the ship before splitting the business in two again. Two bad companies are no better than one bad company. Despite Kraft Heinz’s troubles, Abel should consider buying McCormick, as it is looking to acquire Unilever‘s (NYSE: UL) food business.
A big deal and a unique opportunity
This is a very large transaction for McCormick, as it will roughly double the company’s size. Investors are worried about the transaction, noting that McCormick’s stock fell on the news. It rose as investors digested the story, but then tumbled around 15% as the scope of the deal came into focus. While the shares have recovered after a solid quarterly earnings update, the stock has basically gone nowhere since the acquisition announcement.
So there’s still time for Abel to buy McCormick while it offers a historically high 3.7% yield and a historically low price-to-earnings ratio of roughly 9x. The big opportunity for Abel is helping to finance the transaction, which could allow him to buy preferred stock, a share type that Buffett used to great effect with Bank of America (NYSE: BAC) when the giant bank needed cash.
