Happy Valentine's Day everyone! I hope you're in the mood for love, because a mammoth buyout was the main proponent behind today's move higher in the broad-based S&P 500 . Despite JPMorgan economist Mike Feroli slightly lowering his fourth-quarter 2013 GDP growth forecast to 1.9% from 2.1% due to the effects of spending cuts in the second-half of the year, the S&P 500 advanced fractionally by 1.05 points (0.07%), to close at 1,521.38.
The big reason for today's fractionally higher finish in the S&P 500 was an announcement that Warren Buffett's Berkshire Hathaway would be partnering with Brazilian private-equity firm 3G Capital to buy ketchup maker Heinz , for $23.2 billion. The move looks like a win-win-win for all three parties involved. Buffett prefers brand-name investments with proven track records, modest growth, and solid dividends, which Heinz will offer. 3G Capital has been trying to work its way into the food service sector, and Heinz is a relatively safe way of doing so. Finally, for Heinz shareholders, they get a robust all-cash deal that added 20% to their investment overnight. Not too shabby considering that Heinz' shares had vacillated in less than a $10 range over the past year.
Surprisingly, Heinz's 20% move higher was not the best performer of the day. In fact, it wasn't even close! That honor went to alcoholic beverage producer Constellation Brands , which soared 37%, its largest one-day gain since July 1986 according to Bloomberg, following an announcement that it would be purchasing the rights to the Corona and Modelo beer brands in the United States. Anheuser-Busch InBev had received backlash about a lack of competition if it purchased Negro Modelo, so the $2.9 billion sale of Modelo's brewery in Piedras Negras to Constellation Brands - a cheap price according to research firm D.A. Davidson - clears Anheuser to continue its pursuit of the remainder of Negro Modelo. Yet again, it looks like everyone comes out a winner here.
Finally, solar panel producers First Solar and SunPower continued their rally, just a day after being upgraded to "buy" by Citigroup. Whereas, in years past, domestic solar panel producers were at a distinct pricing disadvantage to Chinese manufacturers, the tables have completely turned. Now, with President Obama intent on securing America's energy independence, and First Solar landing a slew of large projects, its outlook is brightening as quickly as the stock. Unfortunately, you won't find me ending my CAPScall of underperform anytime soon unless I see big subsidies rolling out for the solar sector. Shares of First Solar advanced 7.6% on the day.
Will the Heinz purchase be a boon or a bust for Berkshire?
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Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of Berkshire Hathaway and Citigroup. Motley Fool newsletter services have recommended buying shares of H.J. Heinz and Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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