The consumer staples sector could be about to enter a period of major consolidation. This is already happening to some degree, as seen in the beer and tobacco industries, and now the food and beverage industry could be next.
Many potential deals have surfaced over the past year. For example, last year beer giant Anheuser-Busch InBev (BUD) was reportedly kicking the tires on The Coca-Cola Company (KO). In addition, Kraft-Heinz (KHC) tried to buy Unilever (UL) for $143 billion.
These deals have more in common than meets the eye. Activist investor 3G Capital owns a stake in AB-Inbev, and Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) is Coca-Cola’s largest shareholder. Also, 3G and Berkshire teamed up to complete the merger between Heinz and Kraft Foods, which eventually became Kraft-Heinz.
