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Chocolate Wars: A Win-Win for Buffet?

So is it Berkshire Hathaway's recent increased holding in Nestle, possibly pitted against Berkshire's long-time huge stake in Kraft?

It's ultimately anybody's guess as to which company is going to win the Chocolate War, but as far as Berkshire Hathaway shareholders, which result would have the better portfolio ramifications?

Would a bidding war between Hershey and Kraft force Kraft, which has been prudent so far in its offer, to pull out of the deal, thereby guaranteeing that it doesn't overbid, as Buffett warned them not to do. And if Hershey were to win Cadbury, backed by a needed capital infusion from Nestle, would the Hershey brands Nestle picks up in the process be doubly good for Buffett's shareholders?

Could it be a no-lose situation for Buffett and thereby, possibly his shrewdest investment move yet? Or does Kraft need to get this deal done for Berkshire shareholder to see the biggest bang for their buck? Berkshire owns almost 10% of Kraft, or more than $3.6 billion, and less than 1% of Nestle, or a comparatively measly $166 million.

If so, what is relatively minor Berkshire holding Nestle think it's doing making problems for Kraft on the way to stealing the Cadbury egg?

What do you think about Buffett's role in the current Cadbury drama? Take the poll below, and learn the consensus of TheStreet.


What do you think about Warren Buffett's role in the ongoing Cadbury drama?

No problem -- Kraft and Nestle management are making all their own decisions.
Big problem -- Buffett is clearly meddling too much in this takeover process.

--Written by Eric Rosenbaum in New York

Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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