Kraft Heinz and Campbell Soup

SMITH BRAIN TRUST – Bragging rights go to David Kass. The clinical professor of finance at the University of Maryland’s Robert H. Smith School of Business was smiling a contented grin this week, amid reports that Kraft Heinz might be interested in acquiring Campbell’s Soup. The merger was one he predicted early this year in Smith Brain Trust’s first-ever M&A predictions list.

Kass made the prediction in January 2018. He noted at the time that Heinz had failed to acquire Unilever in 2017 and would likely go after another food company this year.

In acquiring the $13 billion soup maker, the company would look to reduce expenses while growing sales, thereby increasing profits, Kass noted. He observed this week that the tie-up would offer various synergies — among them, tomatoes. Both the soup maker and the ketchup maker use a lot of them.

Though neither company has confirmed the rumor, first reported in the New York Post, Campbell’s stock did heat up this week amid speculation.

Kraft Heinz is 25 percent owned by Berkshire Hathaway and 25 percent owned by 3G Capital of Brazil. Berkshire Hathaway and its CEO Warren Buffett would be the financing partner of a deal to buy Campbell’s Soup, Kass predicted, and 3G Capital would be the operating partner.

“Buffett has said he will only participate in friendly deals,” observed Kass, who has followed Buffett’s investments and philosophy for more than 35 years.