Heinz is to merge with fellow US food behemoth Kraft to establish what the firm’s have asserted will be the third biggest food and drink retailer in North America and fifth largest in the world.
Following earlier speculation, in a statement released today, Kraft said the combined company will be named The Kraft Heinz Company and will be co- headquartered in Pittsburgh and the Chicago area.
The enlarged firm will have revenues of approximately $28bn with eight $1bn plus brands and five brands between $500m and $1bn on its books.
The merger was spearheaded by Heinz owner, the Brazilian private equity group 3G Capital and Warren Buffett’s investment firm Berkshire Hathaway.
Berkshire Hathaway and 3G Capital will invest an additional $10 bn in The Kraft Heinz Company; existing Heinz shareholders will collectively own 51% of the new company, while Kraft stockholders will have a 49% stake.
Buffett said: “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 organizations and delivering shareholder value. I’m excited by the opportunities for what this new combined organization will achieve.”
Alex Behring, chairman of Heinz and the managing partner at 3G Capital, added: “By bringing together these two iconic companies through this transaction, we are creating a strong platform for both US 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.”
John Cahill, Kraft chairman and chief executive said: “Together we will have some of the most respected, recognized and storied brands in the global food industry, and together we will create an even brighter future.
“We look forward to uniting with Heinz in what will be an exciting new chapter ahead.”
Heinz boss Bernardo Hees will become the chief executive of the new firm while Behring will become chairman of the new company, with Cahill as vice chairman.
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