Heinz and Kraft Foods merger to create third largest food company in North America
H. J. Heinz and Kraft Foods have agreed to $46 billion deal to merge operations, creating the third-largest food company in North America. Kraft shareholders will hold 49 percent stake in Kraft Heinz Co. After the deal was announced Kraft stock jumped by 36 percent to close at $83.17. Kraft shareholders will also receive nearly 29% of their current holding valuation as cash dividend.
Warren Buffett's Berkshire Hathaway Inc and Brazilian private equity firm 3G Capital played a major role in finalizing the deal. Berkshire Hathaway will hold 320 million shares in the combined entity. Two years back, Berkshire Hathaway and Brazilian private equity firm 3G Capital had joined hands to acquire controlling stake in Heinz. In the last Berkshire Hathaway letter to investors, Buffett had mentioned that his company will be involved with 3G Capital in few more deals.
People close to the deal informed that 3G approached Kraft CEO John Cahill and told him that Kraft was the best match for the deal. However, they also indicated that if Kraft management declines the deal, 3G would consider other options. Alex Behring da Costa, 48, a 3G co-founder and Heinz chairman Alex Behring discussed the deal with Cahill in Northfield.
The merger between Heinz and Kraft would help in cost cutting and improvement in margins. Heinz currently enjoys a strong margin of $20 profit on even $100 in sales. Kraft has much lower margins but the company is one of the best targets for Heinz to improve its product portfolio and consumer reach.
Last month, Kraft chief executive, John Cahill said, “It’s clear that our world has changed and our consumers have changed, but our company has not changed enough and certainly has not kept pace.”
Heinz Chairman Alex Behring and CEO Bernando Hees will retain their roles in Kraft Heinz Co.
- Tesla’s Model 3 EV with 93-mile range being advertised on Canadian website
- Tesla delays deliveries of refreshed Model S and Model X electric vehicles
- Tesla offering 50% discount on Supercharging at night in California
- GM takes wraps off Hummer EV SUV version; International launch scheduled for 2023
- Toyota’s plug-in car sales in U.S. jump to almost 10,000 in first quarter of 2021
New Zealand News
- Hyundai Motor Corp to create ultra-fast EV charging network E-pit in Korea
- MGE gets six-month extension for South Korea’s Inspire Entertainment Resort development project
- Price of two cheapest trims of Tesla Model 3 electric sedan increased by $500
- Genting Malaysia asks employees to accept reduced pay; executives to take leave without pay
- Tesla to design & build affordable EV in China: Tom Zhu
The Health Department of Northwest Michigan has...Read More
American gaming and hospitality giant Boyd Gaming...Read More
An American citizen who had boasted in front of an...Read More
Pushing the long-awaited Chicago casino project...Read More
A study was conducted to evaluate the effect a...Read More
Tech biggie Google’s recent filing with the US...Read More