NEW YORK—H.J. Heinz Co. is buying Kraft Foods Group Inc., creating what the companies say will be the third-largest food and beverage company in North America.
The deal was engineered by Heinz’s owner, the Brazilian investment firm 3G Capital, and billionaire investor Warren Buffett’s Berkshire Hathaway.
3G Capital is the company behind the takeover of Tim Hortons by Burger King last year.
Heinz shareholders will be majority owners of the merged company and Kraft shareholders will receive stock in the combined company and a special cash dividend of approximately $10 billion, or US$16.50 per share.
Kraft shares closed on Tuesday at US$61.33 and rose by about 25 per cent to US$77.02 in premarket trading after the deal was announced.
Current Heinz shareholders will own 51 per cent of the combined company, with Kraft shareholders owning 49 per cent.
The combined company’s brands will include Kraft, Heinz, Oscar Mayer and others.
Both companies’ boards have unanimously approved the deal, which is targeted to close in the second half of the year. It still needs approval from Kraft shareholders.
Here’s a look at companies and brands that will be combined under the Heinz-Kraft deal:
H.J. Heinz Co.
NET INCOME: $657.1 million (2014)
REVENUE: $10.9 billion (2014)
BRANDS: Classico pasta sauce, Heinz Ketchup, Ore-Ida, Lea & Perrins, Bagel Bites, Nurture infant formula, Weight Watchers Smart Ones, and Golden Circle.
Kraft Foods Group Inc.
LOCATION: Northfield, Illinois
NET INCOME: $1.04 billion (2014)
REVENUE: $18.2 billion (2014)
BRANDS: A1, Athenos, Breakstones, CapriSun, Cheez Whiz, Cracker Barrel, Cool Whip, Country Time Lemonade, Jell-O, Kool Aid, Maxwell House, Oscar Mayer, Planters, Stove Top and Velveeta.