Are Warren Buffett and His Favorite Private Equity Partner 3G Planning to Take A Run At Coca-Cola?

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Nov 21, 2014

An article from the Brazilian magazine Veja on the likelihood of Warren Buffett (Trades, Portfolio) and his Brazilian private equity friends at 3G taking a run at control of Coca-Cola (KO, Financial):

3G Capital, an investment company of Jorge Paulo Lemann, Marcel Telles and Carlos Alberto Sicupira, is talking with clients to capture their next fund, which, like the previous two, invest in a company in the food and beverage industry.

A chance to invest in the new fund is being offered to managers of the richest families in the country and the areas of private banking for big investment banks. Two people contacted said the fund will be 4-5 billion dollars, and a source said the management has received $2.5 billion in commitments (promises of investment).

How has credibility and a history of success with investors, 3G is able to raise billions of dollars without telling clients what company to invest. But the early capture of this new fund means that 3G has already identified the target of your next purchase, or at least working with a short list.

3G executives have said publicly that the idea of ”‹”‹the manager is doing a big operation every year and a half or two years.

The last purchase of 3G was announced in February 2013 when, in partnership with Berkshire Hathaway Warren Buffett (Trades, Portfolio) paid $ 28 billion for the HJ Heinz Company (HJH, Financial), a food company owned the namesake ketchup. (The value includes the assumption of debt of Heinz.)

The previous transaction was in October 2010 when the 3G made an offer to the shareholders of Burger King (BKW, Financial) and the company withdrew the bag, paying $3.26 billion. Two years later, took the fast food chain back to the stock market, where Burger King is now worth $11.4 billion.

The 3G is defined as a "global investment company focused on creating long-term value, with particular emphasis on maximizing the potential of brands and businesses."

As global capitalism is full of housewives' big brand companies, but not always well-managed, speculation about possible targets for acquisition of 3G became a hobby in the financial market. The list goes from the "mother of all acquisitions" (Coca-Cola) to smaller companies but with established brands such as Cheerios maker Kellogg (K, Financial) (see table opposite) .

Continue reading: http://veja.abril.com.br/blog/mercados/gestores/3g-capital-capta-us5-bi-para-sua-proxima-aquisicao/