It’s time for Jorge Paulo Lemann to get back in the hunt.
That, anyway, is the word inside the food industry, where the Brazilian billionaire has been doing blockbuster deals roughly every two years. In 2013, he persuaded Warren Buffett to team up on H.J. Heinz. Then, in 2015, the duo orchestrated the $55 billion merger of Heinz and Kraft Foods.
“It’s logical that this would be the year,” said David Palmer, a food industry analyst at RBC Capital.
The talk has traders on edge. Last month, a story in a little-known Swiss magazine, resurfacing well-worn speculation about Lemann’s plan to buy Mondelez with Buffett, spurred an immediate pop in the U.S. snack giant’s shares. (They soared 28 percent in just a few minutes.) So far, no deal has been announced. Regardless, the question of what Lemann might go after in 2017 has just about everyone grasping for leads. Besides Mondelez, some other names include General Mills, Kellogg and Campbell Soup.
There is even talk that Buffett’s beloved Coca-Cola, a prospect that some dismissed as fantasy, could be in play.
All the attention goes to show just how much the 77-year-old Lemann has reshaped and influenced the global food and beverage industry. In the past decade, Lemann and his Brazilian partners at 3G Capital have made their names with a run of splashy deals, including Anheuser-Busch and Burger King, and a singular vision of hacking away costs at every turn.
Modus Operandi
His team has been so effective at boosting profits that companies have had to change how they do business -- or risk becoming targets themselves. Some industry insiders have criticized 3G’s methods as draconian and short-sighted, and suggest the constant need for acquisitions reflects the fact that cost cuts alone can’t boost sales.
At Mondelez, Chief Executive Officer Irene Rosenfeld says a more balanced approach to improving margins will ultimately lead to bigger returns for shareholders.
“We’ve been walking and chewing gum at the same time,” Rosenfeld said. She declined to discuss whether the maker of Cadbury and Oreos, a long-rumored target for 3G, has been approached about combining with Kraft Heinz.