Billionaire Warren Buffett's investment powerhouse Berkshire Hathaway and Brazilian-led 3G Capital announced Thursday they would take over venerable US ketchup maker Heinz in a deal worth $28 billion. The buyers heralded 144-year-old HJ Heinz Co's strong, global portfolio of prepared food brands, which Buffett called "great tasting" products. The two buyers will pay Heinz shareholders $72.50 per share in cash -- a 20 percent premium on Heinz's Wednesday closing price. Counting debt assumed by the buyers, the deal valued Heinz at about $28 billion, the largest-ever food company takeover, they said. Buffett, founder and chairman of Berkshire Hathaway, told CNBC the deal was the idea of 3G Capital's Brazilian founder, Jorge Paulo Lemann, and that the two would split the equity in Heinz 50-50, with 3G taking responsibility for management. "Heinz is our kind of company with fantastic brands," he said. "It's my kind of deal and it's my kind of partner." Heinz shares later soared to $72.50 on the New York Stock Exchange, adding to a 17 percent gain over the past 52 weeks. Berkshire Hathaway's B shares gained 1.3 percent, to $99.21. "Heinz has strong, sustainable growth potential based on high quality standards, continuous innovation, excellent management and great tasting products," Buffett said in a statement announcing the deal. "Their global success is a testament to the power of investing behind strong brand equities and the strength of their management team and processes." Alex Behring, managing partner at 3G Capital, said his company was very excited about the Heinz name. "It has incredible consumer perception around the world. It is really a powerhouse brand," he said in a press conference in Pittsburgh, Pennsylvania, the home base of Heinz. With $11.6 billion in global sales last year, Heinz is one of the largest US food companies. It owns top prepared food brands such as ABC sauces in Asia, Quero sauces in Latin America, Golden Circle in Australia, Ore-Ida frozen potatoes sold globally, Honig in the Netherlands, Plasmon baby food in Italy, and Smart Ones low-calorie frozen foods in North America. But its main products are the iconic Heinz ketchup, sold globally through markets and fast-food vendors, and one of its earliest favorites in the United States, canned baked beans. "With Heinz stock recently at an all-time high and 30 consecutive quarters of organic topline growth, Heinz is being acquired from a position of strength," Heinz chairman and chief executive William Johnson said, defending the deal. Johnson and Behring stressed that they don't expect any major changes at Heinz, which they said will remain based in Pittsburgh. "It is really about long-term value creation," said Behring. "This company is being acquired from a position of strength," Johnson told reporters. "Our goal here is to make this a bigger, even more global company." The deal is a big one for Berkshire Hathaway, Buffett's wildly successful investment fund. Berkshire has been searching for lucrative ways to invest its $47 billion cash hoard in an environment of low interest rates and intense competition from other cash-rich investment funds for merger and acquisition opportunities. 3G Capital is coming off some of its own blockbuster deals. Its principals built and control the brewing titan Anheuser Busch InBev, now seeking to take over Mexico's Modelo. And they also control Burger King, after a $4 billion takeover deal in 2010. The deal is subject to approval by Heinz shareholders, and is expected to be completed in the third quarter of this year.
GMT 12:09 2018 Monday ,26 November
Black Friday less wild as more Americans turn to online dealsGMT 15:07 2018 Sunday ,18 November
Refugee host countries discuss UNRWA's financial crisisGMT 17:22 2018 Wednesday ,31 October
Russia climbed to 31st place in Doing Business-2019 ratingGMT 16:53 2018 Wednesday ,17 October
"Putin" We need for collective restoration of Syria's economyGMT 14:02 2018 Friday ,12 October
Govt to announce incentives package for Overseas PakistanisGMT 18:26 2018 Saturday ,06 October
Dubai attracts Dh17.7 billion in foreign direct investmentGMT 09:02 2018 Friday ,21 September
Economy of Georgia demonstrates "strong signs of recovery"GMT 09:03 2018 Wednesday ,24 January
German investor confidence surges in JanuaryMaintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©
Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©
Send your comments
Your comment as a visitor