Heinz, Kraft merge to form world's fifth largest food giant
It’s a marriage of ketchup and macaroni and cheese performed by Warren Buffett.
H.J. Heinz Co. is buying Kraft Foods to create one of the largest food and beverage companies in the world with annual revenue in excess of $28 billion.
Buffett’s Berkshire Hathaway also played matchmaker with help from the company that owns Heinz, Brazilian investment firm 3G Capital.
“This is my kind of transaction,“ Buffett said in a statement Wednesday. “Uniting two world-class organizations and delivering shareholder value. I’m excited by the opportunities for what this new combined organization will achieve.“
As part of the dowry, Berkshire and 3G are investing $10 billion in what will come to be known as The Kraft Heinz Co.
The happy couple will maintain headquarters in Pittsburgh, where Heinz is based, and also have an office in the Chicago suburb that Kraft calls home.
Heinz CEO Bernardo Hees will get the corner office as CEO of the new megacompany while Alex Behring, who is Heinz’s chairman and a managing partner at 3G Capital, will be the company’s chairman.
Kraft CEO and Chairman John Cahill will become vice chairman of the new food giant.
It will be the third largest company of its kind in North America with a stable of popular food brands like Oscar Mayer and Ore-Ida.
Shares of Kraft jumped more than 14% before the opening bell Wednesday on news of the deal.
Federal regulators still need to sign off on the merger, but the boards of both companies are expected approve it unanimously, the Associated Press reported.（NY Daily News）