Kraft and Heinz Merger supported by Berkshire Hathaway and 3G Capital

Kraft and Heinz Merger

Kraft and Heinz Merger

Kraft Foods and H.J. Heinz are merging to create fifth-largest food and beverage company in the world.

 Heinz isn’t only ketchup. Among another products includes sauces, soups, pasta, beans and other food brands. Kraft’s brands include Kool-Aid, Jell-O, Planters, Maxwell House and others.

 Heinz, with owners 3G Capital and Berkshire Hathaway, billionaire Warren Buffett’s conglomerate, will own 51 percent of the combined company, while Kraft shareholders will own remaining 49 percent. Berkshire Hathaway will have about $ 9.5 Billion worth of common stock in the Heinz-Kraft Foods company.

 Kraft shareholders will receive a dividend of $ 16.50 a share, or about $10 Billion, which will be paid  for by 3G Capital and Berkshire Hathaway. Its 27 percent premium on Kraft’s market value of about $ 36 Billion on Tuesday trading.

 Merger participants announced would hold on to their investment, rest of the company’s stock will be publicly traded on the NASDAQ.

“I am delighted to play a part in bringing these two winning companies and their iconic brands together,” Mr. Buffett said in a statement. “I’m excited by the opportunities for what this new combined organization will achieve.”

3G Capital has become powerful company in the food brands field. In 2010, 3G Capital bought Burger King too.

 It isn’t first deal between 3G and Berkshire Hathaway. Two years ago The companies buy Heinz for $ 23 Billion and Tim Hortons acquisition for about $ 11.4 Billion in August 2014.

 Alex Behring, 3G Managing partner will be Chairman of Kraft Heinz, while Bernardo Hees, the CEO of Heinz, will be the CEO of the combined company.

 Because of no debt financing, deal will without assistance of banking BIG FOUR. Kraft was advised by Centerview Partners, while Heinz was advised by independent investment bank Lazard.

 Lazard and the law firms Cravath, Swaine & Moore and Kirkland & Ellis advised Heinz. Kraft advisors were Centerview and the law firm Sullivan & Cromwell.

 

Mr. Stakebay says:

The combined company will have revenue of about $ 28 billion, eight brands with at least $ 1 billion in sales and five brands with between 500 million and 1 Billion in sales with co-headquarters in the Chicago and Pittsburgh areas. Company worth more than $ 70 Billion with expected growth to $ 100 Billion by 2017. Berkshire Hathaway will own 26 % of combined company valued about $ 21 Billion, which will represent second largest common stock investment after Wells Fargo.

 

CEO and Chairman of Kraft foods………………John Cahill…………….(2014 – present)………$ 5 996 779 (2013)

CEO of H.J. Heinz Company ……………..Bernardo Vieira Hees……..(2013 – present)………$ 9 169 480 (2013)

 

KRAFT FOODS

HEINZ J. COMPANY

Revenue

$ 18.205 billion (2014)

$ 10.9 Billion (2014)

Operating income

$ 1.890 billion (2014)

$ 1.451 Billion (2014)

Profit

$ 1.043 billion (2014)

$ 1.013 Billion (2014)

Total assets

$ 22.947 billion (2014)

$ 12.939 Billion (2014)

Total Equity

$ 4.365 billion (2014)

$ 2.802 Billion (2014)

Employees

22 500 (2014)

35 000 (2014)

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