Reuters/Rick Wilking
- Warren Buffett declined an invitation to acquire Whole Foods in 2017, the high-end grocer’s boss discloses in his new book, “Conscious Leadership.”
- Whole Foods CEO and cofounder John Mackey and his team approached Buffett about a buyout, but the billionaire investor and head of Berkshire Hathaway said it wouldn’t be a good fit.
- Buffett’s love of fast food and disdain for healthy eating may have been a factor in his decision.
- “I don’t see smiles on the faces of people at Whole Foods,” the investor joked in 2015.
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Warren Buffett turned down the chance to buy Whole Foods in 2017, CEO and cofounder John Mackey reveals in his new book, “Conscious Leadership.”
“We contacted Warren Buffett to see if he had any interest in possibly buying Whole Foods,” the boss of the premium grocery chain said. “He responded that it wasn’t a good fit for him.”
Whole Foods’ bosses approached Buffett at a time when they were fending off JANA Partners, an activist investor.
They feared JANA would seize control of the company and flog it to the highest bidder, and worried the new owner would betray their values by selling inferior products, firing thousands of workers, and dismantling the company.
When Mackey and his team discussed who they would prefer to sell to, they landed on Buffett's Berkshire Hathaway as one option.
Berkshire is famously hands off when it comes to acquisitions, preferring to purchase high-quality businesses with excellent management that it can trust to excel with minimal intervention.
Mackey also met the CEO of Albertsons, but decided the grocer wouldn't be a good partner. He ended up selling Whole Foods to Amazon for $13.7 billion.
The Whole Foods chief draws on a Buffett quote to describe the deal in his book: "I believe that Whole Foods is a wonderful company and Amazon paid a fair price for it."
Whole Foods and Berkshire Hathaway didn't immediately respond to requests for comment from Business Insider.
Buffett has basic tastes
Buffett may have rejected Whole Foods' approach because he loves fast food and detests health eating.
The 90-year-old investor munches McDonald's for breakfast and guzzles five cans of Coke a day. Moreover, Berkshire owns See's Candies and Dairy Queen, and counts Coca-Cola and Kraft Heinz among the biggest holdings in its $200 billion stock portfolio.
"I've never been near the place," he said about Whole Foods during Berkshire's annual shareholder meeting in 2004.
"When I compare drinking Coca-Cola to something that somebody would sell me at Whole Foods ... I don't see smiles on the faces of people at Whole Foods," the Berkshire boss quipped at the 2015 annual meeting.
However, Berkshire may be gradually improving its diet. It bought a small stake in grocery chain Kroger last year, and last quarter it exited a small position in Restaurant Brands, the owner of Burger King and Tim Hortons.
It also holds a small Amazon stake, making it an indirect owner of Whole Foods.