But Unilever rebuffed the $143 billion deal, and Kraft Heinz shares have since lost about half their value as investors wait for the next big move.
Unsurprisingly, Kraft Heinz (KHC) stock plunged as much as 20% in after-hours trading. The SEC declined to comment.
The company's CFO, David Knopf, told an analysts' call Thursday that the company conducted its own investigation after learning of the SEC investigation and determined it should have recorded $25 million in prior periods instead of the fourth quarter.
Kraft Heinz Co. plummeted the most on record Friday, one day after writing down the value of some of its best-known brands by US$15.4 billion, an acknowledgment that changing consumer tastes have destroyed the value of some of the company's most iconic products.
Berkshire, which is run by legendary investing billionaire Warren Buffett, owns almost 27% of Kraft Heinz common shares. The trend hasn't been good for some of Kraft Heinz' standbys like Jell-O and Kool-Aid and Oscar Mayer hot dogs.
Under 3G, Kraft Heinz embraced zero-based budgeting, a cost-conscious strategy meant to improve operating margins that requires managers to justify all expenses, from pencils to forklifts.
Wall Street was doing just that Friday.
"We were overly optimistic on delivering savings that did not materialize by year end", said Kraft Heinz CEO Bernardo Vieira Hees.
JPMorgan analyst Ken Goldman said the entire strategy of 3G Capital to seek growth through cost cuts is now questionable.
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But said it did not expect that inquiry to be "material" to financial results.
The results were affected by a $15.4 billion non-cash impairment charge to write down goodwill and certain intangible assets, including the Kraft and Oscar Mayer trademarks.
The company, which competes with General Mills Inc and Kellogg Co, cut its quarterly dividend to 40 cents per share from around 63 cents per share on Thursday.
On Friday, those household names littered the list of worst-performing stocks on the S&P 500, possibly signalling fears of worse to come this year for the makers of some iconic American brands. The company said it is working to prevent similar mistakes going forward.
That was most worrisome to Stifel analyst Christopher Growe, who stripped his buy rating from the company's stock.
Kraft, which owns Velveeta cheese and Heinz ketchup brands, forecast adjusted earnings before interest, tax, depreciation and amortization (EBITDA) between $6.3 billion and $6.5 billion in 2019, lower than analysts' estimates of $7.47 billion, according to IBES data from Refinitiv.
The company also slashed the dividend by more than a third and revealed it was being investigated by the Securities and Exchange Commission.
"The weak underlying performance of the business and the continued need to reinvest back into the business likely keeps the company from pursuing consolidation any time soon", Growe said.