Berkshire CEO Abel praises Kraft Heinz for turnaround on planned split

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Berkshire Hathaway’s new CEO likes the surprise course reversal announced this week by the new CEO of Kraft Heinz.

In the food company’s Q4 earnings release, Steve Cahillane said in the time since he joined the company five weeks ago, he has “seen that the opportunity is larger than expected and that many of our challenges are fixable and within our control.”

As a result, he’s decided to “pause work” on the planned separation of Kraft from Heinz that was announced last September. It would have essentially reversed the merger Warren Buffett helped orchestrate in 2015.

Berkshire is KHC’s biggest shareholder with a 27.5% stake currently worth $8.1 billion.

In a statement given to CNBC and other news outlets, Berkshire CEO Greg Abel endorsed the change. “We support CEO Steve Cahillane and the Kraft Heinz Board of Directors’ decision, under Steve’s new leadership, to pause work on the company’s previously planned separation. As a result, management can commit to strengthening Kraft Heinz’s ability to compete and serve customers.”

Buffett, who usually does not criticize the management of a Berkshire holding, was uncharacteristically vocal about his disapproval when plans for the split were made public more than five months ago.

In an off-camera phone call with CNBC’s Becky Quick, he said he was “disappointed” and didn’t rule out selling some or all of Berkshire’s stake.

“It certainly didn’t turn out to be a brilliant idea to put them together, but I don’t think taking it apart will fix it.”

Just three weeks ago, Abel appeared to signal a sharp reduction of Berkshire’s KHC position with an SEC registration for “the potential resale” for “up to” 99.9% of the 325.6 million shares it reported holding as of September 30.

Kraft Heinz’s decision to remain intact may help keep those potential sales from becoming reality.

Did Berkshire’s preparation for KHC share sales play a role in Cahillane’s reversal?

I certainly don’t know, but if it did, and if it was an intentional effort to pressure KHC, it would be a significant departure from Buffett’s long-standing hands-off policy when it comes to the companies in Berkshire’s equity portfolio.

Kraft Heinz shares fell when the split reversal was announced Wednesday morning but quickly rebounded to end the week with a small 0.7% gain.

Among the key…