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Professor Hart Posen Comments on Heinz Acquisition of Kraft Foods

by Rob Kelly Friday, March 27, 2015

Two local media outlets covering H.J. Heinz’s plan to buy Kraft Foods feature commentary from Hart Posen, associate professor of management at the Wisconsin School of Business.

hart posen uw-madison wisconsin school of business management and human resources

Hart Posen, Associate Professor of Management and Human Resources at the Wisconsin School of Business.

In the Wisconsin State Journal article titled “H.J. Heinz Buying Oscar Mayer-Parent Kraft Foods in Deal to Create Food Giant,” Posen discussed the rationale of the deal and its potential impact on Madison, where Oscar Mayer is based.

Company executives expect the deal to create cost efficiencies of $1.5 billion by combining manufacturing and distribution networks, improving the ability of Kraft Foods to negotiate better prices on ingredients. “It reflects, in part, the need for bigger scale in this industry,” says Posen. “At this point, there is no clear information to suggest any direct impact on Madison. Anything that strengthens brands, like Oscar Mayer, in the long run, strengthens employment opportunities underneath those brands.”

Posen addressed the idea of layoffs directly in an In Business article titled “Will the Kraft-Heinz merger lead to local job cuts?”

“I think it’s reasonable to think that in general, at the combined organization, there will be cuts in jobs,” he says. “But there may be cost savings associated with scale economies, logistics, distribution, and other sources that may or may not require or lead to substantial job cuts.

“I think anything we say now is purely speculative, and anything we say with regard to, for instance, Oscar Mayer here in Madison, is really speculative.”

Read the full articles on the Wisconsin State Journal website and on the In Business website.