Campbell to General Mills Gain on Berkshire’s Deal to Buy HeinzJames Callan and Karl Baker
Consumer stocks including Campbell Soup Co., General Mills Inc. and J.M. Smucker Co. advanced after Warren Buffett’s Berkshire Hathaway Inc. and 3G Capital agreed to buy H.J. Heinz Co. in a $23 billion deal.
Campbell, the world’s largest soup maker, jumped as much as 6 percent to $40.56 for the biggest intraday gain in more than four years. General Mills, the maker of Cheerios cereal, increased as much as 3 percent to $44.26, the highest intraday price since at least 1980. Smucker, the maker of its namesake brands and Jif peanut butter, rose as much as 2 percent to $92.15 for the highest intraday price since at least 1988.
The gains follow the announcement of the Heinz deal, in which Berkshire’s billionaire chairman increases his bets on consumer products. The buyers will pay $72.50 a share for the maker of condiments and Ore-Ida potato snacks, compared with yesterday’s closing price of $60.48.
Investors are speculating that other large food company purchases could happen as a result of the Heinz deal, said Jack Russo, an analyst at Edward Jones & Co. in St. Louis.
“That’s exactly what’s going on,” Russo said in an interview. “People start asking who’s going to be next?”
Russo declined to name specific takeover targets.
The Standard & Poor’s 500 Consumer Staples Index rose 0.2 percent at 12:32 p.m. in New York while the Dow Jones Industrial Average and the S&P 500 both fell less than 1 percent.