Buffett’s Kind of Deal

It is by now almost trite to say that there are deals and then there are Buffett deals. And the $23 billion acquisition of H.J. Heinz is certainly a Buffett deal.

Warren E. Buffett is known for picking public targets, setting his price and the targets agreeing without much bargaining to be acquired. If you need examples, look at Berkshire Hathaway’s big acquisitions of Burlington Northern, Lubrizoil and Wrigley’s. In those deals, once Mr. Buffett showed up, the companies appeared to lose interest in finding any other bidders.

We don’t know the full story of what Heinz, a legendary consumer products company, did to find other suitors or to make sure shareholders were getting a full price. We will learn more once the proxy statement for the deal is filed. But this is an unusual deal already even at the beginning. For evidence, you need look no further than the agreement for the deal filed on Friday morning.