Kraft and Heinz Merge to Become Worlds 5th Largest Food Company
Kraft Foods Group, which makes Oscar Mayer meats and macaroni-and-cheese products, will merge with ketchupmaker H.J. Heinz Co. to become the fifth largest food-and-beverage company in the world and the third largest in the U.S. The new company, the Kraft Heinz Co. will be co-headquartered in the Chicago and Pittsburgh areas and will have revenues of roughly 28 billion, the companies announced in a statement Wednesday. Eight of its combined brands will be worth more than 1 billion each, while five will be worth approximately 500 million to 1 billion each. Berkshire Hathaway Inc. and Brazilian private-equity firm 3G Capital, which co-own Heinz, will invest an additional 10 billion into the merged company, of which current Heinz and Kraft shareholders will collectively own 51 and 49 respectively. Kraft shareholders will also receive special cash dividends of 16.50 per share. "This is my kind of transaction, uniting two world-class organizations and delivering shareholder value," Berkshire Hathaway chairman and CEO Warren Buffett said in a statement. "I'm excited by the opportunities for what this new combined organization will achieve."