Returning to the remote site where the german airliner crashed. Searchers have find the cockpit voice recorder from the german a320 plane. Authorities will want to know why the pilots made no distress call as the plane plunged from 38,000 feet. That is going to be the number one item. Why wasnt there any call . There were multiple radios on the airplane, multiple ways to communicate. Why wasnt there a message . They will be looking at that very closely to find out what was going on in the caulk it or around the cockpit at the time of the event. Olivia the searchers are still looking for the flight data recorder. The crash killed all 150 people on board. President obama is no delaying the withdrawal of troops from afghanistan. The president backed off his plan to slash the number of u. S. Troops there this summer. 10,000 troops will stay in afghanistan until the end of this year. The president says the u. S. Mission is simple. President obama we want to make sure we are doing everything we can to help Afghan Security forces succeed so we dont have to go back. Olivia there is also another advantage to keeping u. S. Forces in afghanistan. It will keep make it easier for the u. S. And the cia to conduct drone strikes from there. Brendan the republican budgets are identical, except for defense spending. One calls for 94 billion in defense spending. There will be 20 billion in defense spending cuts. Apple has bought Database Software foundation db. According to a person familiar with the matter, the move is expected to help apple improve the speed of their software devices. A painting by Pablo Picasso could be yours for 140 million. His women of algiers will hit the Auction Block on may 11 in new york. Get your paddles ready. We have breaking news. Tom the wall street journal reported overnight on the kraft transaction. This is very simple. It is a merger and a remerger. Mr. Buffett is involved in this transaction. Olivia Berkshire Hathaway is once again teaming up to buy up another big American Food company. They are in advanced talks to buy kraft foods. Heinz will in fact merge with kraft. Tom heinz will own 51 . Olivia the heinz ceo will become ceo of kraft. Tom so i can put heinz ketchup on mike on my kraft velti to cheese . Velveeta cheese . Brendan havent you been doing that for years . Tom yes. We have a perfect guest. This is dinosaurs mating. Ugly business. Dave driscoll out at citigroup has great stuff on this. Minimal revenue growth. All sorts of ceo challenges. When in doubt you just cut cost, dont you . Thats exactly right. You see the cost cutting mechanism they can put in place. A lot of these companies are inflation hedges. U. S. Inflation is starting to rise. That will be positive for companies such as hines, such as crafts, and the other Consumer Companies out there. Tom the symbolism here of apple as a dow stock while a Brazilian Private Equity Firm makes a tough decision it is amazing. You have two old stodgy businesses that could have been dow components and Something Like apple now on the dow. A remarkable time, isnt it . That is one of many metaphors that we can see for the changing world. Brendan when we talk about costcutting, it is important to put this into perspective. This is not just costcutting. Costs are like fingernails, they must be cut constantly. This is all that they do. Olivia given the fact that we have equity markets at a record high it is not that frothy of a valuation. The current valuation looks like it will be about 40 billion which would imply a premium of about 8 . The other headline we are getting is that 3g along with berkshire is going to invest 10 billion. I want to bring in at hammond. Ed hammond. Tom did you sleep last night . A little bit. Olivia are they going to cut the fat or build up an american barbecue condiment empire . I think a bit of both. Pulling together with heinz gets them this empire. Will they cut the fat . Definitely. They are the best in the business at doing it and they do it from the top down. We saw them do it at burger king. We have seen them do it at heinz. They cut back any kind of access. Excess. They will reduce any unnecessary fat around the edges. Brendan if you read the feature from business week some examples at burger king you have to get permission from your boss to make a color copy. Tom they do that to me every day. Brendan there is no free budweiser at budweiser anymore. Tom i remember the shock in st. Louis over what they did to budweiser. Dave driscoll is doing great work over at citigroup. Kraft is an expensive stock. There is the fragility and the immediacy of kraft. What is the timeline of 3g . When you look at where they want to go five years out, where do they want to be . They go in with an approach of how much can we squeeze from this business . How much can we cut the cost . How efficient can we get it . They do whatever they need to do and then they find companies to merge it with or they take it back out into the market. They are extremely smooth operators. Olivia that is very important to keep in mind. 3g has a much more different buyout style. 3g tends to hold longer. They also do not like to go out to any old fundraising. They get too big, wealthy people like bill ackman and Warren Buffett who can do these deals with them. Brendan they cut the cost. But they dont sell it for parts. Tom i like that idea. What is the size of this deal . Olivia 37 billion dollars. I believe it is going to be a valuation of about 40 billion. Tom is this the biggest thing that war and has ever done . Warren buffett has ever done . It signals to things. The market is in great shape. The cost of borrowing is very low. At the moment, we can say see that there are really Great Companies out there in terms of brand names that are not trading over the top under presenting good inflation hedges. Tom lets look at relative valuation. Campbell soup is not on here. Im sorry, folks. I did not do here i did not do that. This is mondo lays mandalays , which is part of kraft. It is 20. 6 margin. This is a company doing a little bit better than the other two. Brendan is it possible to put up a basket of American Companies that are having longterm habits because habits are changing . People dont eat these things anymore. Tom excuse me . Brendan people. Dont eat these things anymore. Tom look at the video. Im going to start crying. [laughter] there is a decline in the businesses, but there was a good case to be made that these are inflation hedges. U. S. Inflation is starting to rise. Tom what is the distinctive feature that has not been reported yet . We are all trying to figure out what they have done to get here and what else they have looked at. The thing with 3g is that they run everything. What else did they look at . What did they pass up on . Tom Campbell Soup. Campbell soup has been a dog. I have no gray hair and it was identified as a dog. It is an owner that does not want to sell it. They do not want to get rid of it. 3g could have taken it. It is a dog. Tom with the success of mondelez when you add in the new kraft valuation, that is a phenomenal value creator. It is a phenomenal value creator. Tom did you say they tripled margins at burger king . Olivia yes. To your point about whether or not this was expected obviously, we knew that Warren Buffett said he knew he was going to be hunting for elephants and doing a big deal the ceo of kraft used to work at ripplewood, which is a private equity firm. There was a sense that kraft might be on the table because this was a new ceo that might be more open to dealmaking, versus the person that runs campbells. Brendan when we look around are there any other american Consumer Companies other than campbells that are waiting for this kind of a takeover . Catalogs kelloggs is another one that has been speculated. I think they might wait a while before doing another one of these. They have deep pockets. They are very ambitious. If you could team up with people like Warren Buffett, the sky is the limit. Tom we have not been a bloomberg terminal monitor, but i think this is important. They have made a velveeta kroner. Cronut. I think this is very important. Brendan we like velveeta cheese. Tom you give your father a stick of velveeta cheese . Have you ever had it . Olivia no. Brendan i dont even know what it is. Olivia ed, is kraft heinz moving to canada . It would not be unlikely. It would be an extremely aggressive step. It would take Financial Engineering to do that. Olivia ed thank you for joining us on the news of the make a merger between heinz and kraft. Tom you have never had velveeta . Olivia maybe. At camp . [laughter] olivia can 3g turnaround kraft . What will brazilian billionaire jorge liman do . Tom good morning, everyone. Bloomberg surveillance. Lets get right to top headlines. Olivia heinz and kraft announcing that they will merge and it will create the thirdlargest food and Beverage Company in north america. Kraft shareholders will own 49 of the combined company with heinz shareholders taking the other 51 . Berkshire hathaway and 3g capital will invest 10 billion in the new company. In france, workers are looking threw the remote site where the german crash occurred. They have found the flight recorder from the Germanwings Flight that crashed. They are still looking for the flight data recorder. Turmoil in yemen. Shiite rebels closed in. The tv station controlled by the rebels says they have seized an airbase that had been used by air u. S. By u. S. Advisors. A senior official is saying intelligence is being sent to Government Forces in tikrit. It is the first direct involvement in the offensive by u. S. Coalition forces. Ukrainian president Petro Poroshenko is firing the governor of the eastern region. The governor is a billionaire who was fighting to stop the government from seizing one of his businesses. Singapores government is extending viewing hours for those morurning the nations first Prime Minister. He died at the age of 91. His body will i and state until his funeral on sunday lie in state until his funeral on sunday. We will talk about talent wars between wall street and Silicon Valley. Then, is sothebys and Economic Indicator . Then we will talk to celebrity fitness entrepreneur Tracy Anderson. Tom we need to move to france. A very difficult story. Hans tackles hans nichols has traveled to the south of france. Great sadness this morning and great mystery. What have you learned in the last six hours . Hans i have learned just how difficult a recovery operation here would be. You see behind me these outs alps. They think the crash happened at about 15001700 meters. The snow starts about 2000 meters. In between me and their the mountain rises and you cannot land a helicopter on a steep slope. That means sending in people by foot. We dont have word on whether they have recovered the second part of the black box. That is the part that records the flight data. We dont know how intact the voice data is. Tom what is the linkage of the three governments working together . I thought the reporting this morning was quite responsible, but how closely linked is this recovery of three nations . Hans everyone is drawing on expertise of all the countries. Eventually, the remnants of the plane will be brought together and assembled in paris. There are officials on the ground from all countries and leaders and heads of state will also be arriving. As you may have noticed, the wind has picked up a little bit. Previously, that was not a factor in the recovery. It is darkness that they are fighting against. It does appear to be a coordinated effort. So often, i talked to you about europe fragmenting and what is happening with greece and brussels. It is moments like these that you get a sense of how strong european unity is and how everyone does come together and Work Together and try to find a solution. It appears that the coordination is that the highest level and working quite smoothly. Tom hans nichols, thank you so much. Stay with us. Bloomberg surveillance. Tom good morning, everyone. The gorgeosity of spring in new york. We are getting a touch of warmth in the air. Olivia my morning mustread comes from greeces finance minister yanis varoufakis. He writes speaking about the first bailout. His criticism is that the bailout effectively just transferred private losses to taxpayers, to public citizens. I know you know yanis varoufakis. What you make of this . Isnt he supposed to be coming up with a laundry list of reforms that he is going to enact . Brendan i think this is classic where a fact this yanis varoufakis. Before he became finance minister, he was a popular commentator on what was happening in greece. He was very good at framing what happened. Sometimes i wonder reading ellis factors whether if it is still not a cultural problem in europe. That is absolutely correct. In europe and the u. S. , you have a union, but in the u. S. , you have a fiscal union. That is one of the fundamental problems with europes recovery. Brendan do you think germans understand that their own banks got bailed out because they give money to greece . I dont think people have a long enough memory to remember when their own country got bailed out. Olivia yes. You also talked about the toxic blame game. I dont think bringing up war reparations helps. [laughter] we will discuss wall street and Silicon Valley next. This is bloomberg surveillance. Tom good morning, everyone. Yields grinding ever lower. Lets get to our top headlines. Olivia a big merger in the food business. Heinz is combining with kraft and a deal backed by 3g and Berkshire Hathaway. The deal is a mixture of stock and cash. Kraft has a stable of wellknown brands. Berkshire hathaway and 3g have agreed to invest another 10 billion in the company. 3g also owns burger king. In france, ground crews are making their way to the flight of that germanwings plane crash. The airbus a320 plunged into a remote area of the french alps. All 150 people on board were killed. Investigators are hoping that they may be able to figure out why the plane made a rapid descent from 38,000 feet. President obama says establishing a framework for a palestinian state probably wont happen soon. The reason is the comments by israel he Prime MinisterBenjamin Netanyahu. President obama said the u. S. Is committed to a palestinian state. President obama we believe that two states is the best way forward for israels security for palestinian aspirations, and for regional stability. That is our view and that continues to be our view. Prime minister netanyahu has a different approach. Olivia the president described his relationship with netanyahu as very businesslike. Brendan republican president ial candidate ted cruz took a shot at his wifes employer. Heidi cruise is on unpaid leave from Goldman Sachs. Ted cruz said Goldman Sachs is positive and negative. Senator cruz my criticism of washington is they do favors for wall street. They do crony capitalism. I have been taking on leaders in both parties. I think if they are building a better mousetrap, great, but it should not be government favoring. Brendan he says that goldman is entitled to practice its business, but without subsidies from the government. Mark zuckerberg is going to make his pitch to software developers. He will rollout tools that will help at makers reach the audience. Zuckerberg talked about the conference on his facebook page. We are still putting the whole place together. We will have about 25 developers here tomorrow. I think about 35,000 developers are watching and joining us online. Im excited to talk about all of the new things we have been building to serve our community to build great new mobile experiences to help you share. Tune in tomorrow. Brendan one wonders whether Sheryl Sandberg can find him an audio engineer. [laughter] brendan in sports, it may be the only thing that Jack Nicholas had not one before. He came to receive the congressional gold medal. He won a record 18 major championships and he had also been awarded the president ial medal of freedom. Tom very good. Go west, young cfo. It is an interesting trend. The siring call of Silicon Valley beckons many. Michael for tech parachuted in this morning. He survived the flight based on his iced mint mode he does mojitos. Maybe they need an adult in the room. Is her job to be the adult for google and to bluechipzize like apple. Google is definitely on a bluechipizing trend. That is a good point. I think that they have a core business that everyone knows about and they are making big, longterm bets. Google is not very good at church competing in a field that is competitive. They are good at longterm bets. Tom is this a responsibility where she has to be an adult in the room . I think she will be the person who helps explain the complicated strategy to wall street. They lost their ir person to alibaba. This is their move to restore it. I dont think this is a huge move from wall street to Silicon Valley. It is just a step up from make it cap to make a cap. I do think she has to explain the complexity of google to wall street. Brendan you dont look at where the talent goes, you look at where the money goes. One of the things that is interesting about Silicon Valley is that you have investment banks going out and trying to get in on second and third rounds of funding. It is where the best returns are. We would be managing our client portfolios toward technology exposure. To me this is a fantastic metaphor for what we are seeing from an industry perspective. Moving from Financial Services over to technology. Brendan it is fascinating. You say this has been going on forever. I think the shift would be from goldman to