Connections Motivate Buffett to Invest in Kraft

Warren Buffett, the head of Berkshire Hathaway Inc, is the latest major investor to claim a stake in Kraft Foods. We decided to map Buffet’s ties to Kraft to see what may have motivated this newest investment decision, beyond, of course, the peer pressure he might have felt from Carl C. Icahn and Nelson Peltz (see related article at BloggingStocks).

This IntellectSpace Knowledge Map displays the common connections through various companies and people that Buffett has to Kraft Foods. One key relationship revealed was Buffett’s relationship with Marla C Gottschalk, who now serves as the CEO of Pampered Chef (a Berkshire Hathaway company). Gottschalk spent more than a decade at Kraft, most recently as Senior Vice President, Financial Planning and Investor Relations, and it’s likely that Buffet recognized and appreciated this source of extensive insider experience/knowledge.  Gottschalk could have either put in a good word for Kraft or may even be involved with part of Kraft’s future plans.

In case Buffett still had reservations about making a committment, he could turn to some of the contacts he may have made through Coca-Cola or Gillette. Before its acquisition by Proctor & Gamble, Buffett sat of the board of directors of Gillette with Roger K. Deromedi and James L. Kilts, who, until recently, were senior executives at Kraft along with Mark M. Leckie, another Gillette executive. If he faced the predicament of whether or not he should invest a small fortune in Kraft, it probably wouldn’t have been too difficult to turn to any one of these people for an informed second opinion.

Click here for an interactive version of this IntellectSpace Knowledge Map (Internet Explorer browsers only): http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=386c002c-c244-47ce-a193-b770ca1e868a

Comments

[Sal Bando]

Buffett used to own General Foods, which was bought by Kraft.