Heinz is to merge with Kraft Foods Group to create Kraft Heinz, the third largest food and beverage company in the US.
The deal was instigated by Brazilian investment firm 3G Capital and Warren Buffet’s Berkshire Capital, who bought Heinz for $23bn (£15.5bn) and took the company private in 2013.
Current Heinz shareholders will own 51% of the new combined company, while Kraft shareholders will own the remining 49% and receive a special cash dividend of $16.50 (£11.09) per share, financed by a $10 billion investment from 3G Capital and Berkshire Hathaway.
Warren Buffett, commented:
“I am delighted to play a part in bringing these two winning companies and their iconic brands together.
“This is my kind of transaction, uniting two world-class organisations and delivering shareholder value. I’m excited by the opportunities for what this new combined organisation will achieve.”
Alex Behring, chairman of Heinz and the managing partner at 3G Capital, said:
“By bringing together these two iconic companies through this transaction, we are creating a strong platform for both US and international growth.”
Shares of Kraft Foods were up nearly 15 percent in premarket trading.
