Ketchup maker, H.J. Heinz Company’s acquisition by 3G Capital and Berkshire Hathaway, Inc. (BRK.B - Analyst Report) closed last week on Jun 7.
In mid-Feb 2013, Heinz agreed to be acquired by an investment group led by Warren Buffet’s company, Berkshire Hathaway,and the private Brazilian investment firm, 3G Capital, for $28 billion, including debt. Heinz’s shareholders overwhelmingly approved the merger at a special meeting held in New York on Apr 30.
As per the terms of the pending merger, Heinz’s shareholders will receive $72.50 per share. Heinz became a private company after completion of the acquisition and its common stock no longer trades on the New York Stock Exchange.
Berkshire Hathaway, led by Warren Buffett, owns leading businesses across a variety of industries, while 3G Capital is a global investment firm holding stakes in companies like fast food chain, Burger King Worldwide, Inc (BKW - Analyst Report).
With the closing of the transaction, Burger King’schief executive officer (CEO), Bernardo Hees became the CEO of Heinz. Hees, who has played a pivotal role in growing profits at Burger King, replaced Heinz’s Chairman, President and CEO, William Johnson who retired from his position on the same day. Heinz also announced the appointment of Paulo Basilio as the Chief Financial Officer of company.
Berkshire and 3G Capital are expected to benefit from Heinz’s robust global portfolio of leading brands, which focuses on three attractive and growing food categories: ketchup and sauces, meals and snacks, and infant/nutrition. Also, Heinz has a strong market position where it is consistently delivering solid organic growth, showing continued and strong improvement in the emerging markets, making robust marketing investments, continuously innovating and reducing expenses aggressively.
Other food companies that are currently doing well include Flower Foods Inc. (FLO - Snapshot Report), carrying a Zacks Rank #1 (Strong Buy), and Campbell Soup Company (CPB - Analyst Report), carrying a Zacks Rank #2 (Buy).