In a landmark transaction for the food industry, leading ketchup maker H. J. Heinz Company agreed to be acquired by an investment group led by Warren Buffet’s company, Berkshire Hathaway, Inc. (BRK.B - Analyst Report) and private Brazilian investment firm, 3G Capital for $28 billion, including debt.
Berkshire Hathaway, led by Warren Buffett, owns leading businesses across a variety of industries while 3G Capital is a global investment firm holding stake in companies like fast food chain, Burger King Worldwide, Inc (BKW - Analyst Report).
Heinz’s shareholders will receive $72.50 per share, a 19% premium to Heinz’s all-time high share price. The transaction has been approved unanimously by the board but is subject to shareholder and regulatory approvals. The deal is expected to be closed in the third quarter of this calendar year. Heinz will become a private company after the acquisition is complete. The acquirers have promised to maintain Heinz’s headquarters at Pittsburgh.
Both Berkshire Hathaway and 3G Capital are known to invest in iconic businesses and brands and broadening them further. Heinz has a robust global portfolio of leading brands, which focuses on three attractive and growing food categories: ketchup and sauces, meals and snacks, and infant/nutrition. The company’s largest and fastest growing product category is ketchup and sauces led by Heinz, the iconic #1 ketchup brand. The investment firms are acquiring Heinz from a strong position where it is consistently delivering solid organic growth, showing continued strong improvement in emerging markets, making robust marketing investments, continuously innovating, and saving costs aggressively.
Yesterday, another huge consumer staples company, PepsiCo, Inc. (PEP - Analyst Report) announced impressive fourth quarter results, beating the Zacks Consensus Estimate for both revenue and earnings.