H.J. Heinz Company and Kraft Foods Group to merge

H.J. Heinz Company and the Kraft Foods Group have announced a definitive merger agreement to create The Kraft Heinz Company, forming the third largest food and beverage company in North America.

Under the terms of the agreement, which has been unanimously approved by both Heinz and
Kraft’s Boards of Directors, Kraft shareholders will own a 49% stake in the combined company, and current Heinz shareholders will own 51% on a fully diluted basis.

Kraft shareholders will receive stock in the combined company and a special cash dividend of $16.50 per share. The aggregate special dividend payment of approximately $10 billion is being fully funded by an equity contribution by Berkshire Hathaway and 3G Capital.

Alex Behring, chairman of Heinz and the managing partner at 3G Capital, says, “By bringing together these two iconic companies through this transaction, we are creating a strong platform for both U.S. and international growth. Our combined brands and businesses mean increased scale and relevance both in the U.S. and internationally. We have the utmost respect for the Kraft business and its employees, and greatly look forward to working together as we integrate the two companies.”

Warren Buffett, chairman and CEO of Berkshire Hathaway says, “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.”

 

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