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H.J. Heinz Co. has entered into a definitive merger agreement to be acquired by an investment consortium comprising Berkshire Hathaway, an owner and investor in leading businesses across a variety of industries, and global investment firm 3G Capital Management LLC.
Under the agreement, which was unanimously approved by Heinz’s board of directors, Heinz shareholders will receive $72.50 in cash for each share of common stock they own, in a transaction valued at $28 billion.
“The Heinz brand is one of the most respected brands in the global food industry, and this historic transaction provides tremendous value to Heinz shareholders,” said William R. Johnson, chairman, president and CEO of the Pittsburgh-based company. “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. As a private enterprise, Heinz will have an opportunity to drive further growth and advance our commitment to providing consumers across the globe with great-tasting, nutritious and wholesome products.”
“Heinz has strong, sustainable growth potential based on high quality standards, continuous innovation, excellent management and great-tasting products,” noted Warren Buffett, chairman and CEO of Omaha, Neb.-based Berkshire Hathaway. “Their global success is a testament to the power of investing behind strong brand equities and the strength of their management team and processes.”
“We approached Heinz to explore how we might work together to expand the value of this storied brand,” added Alex Behring, managing partner at Pittsburgh-based 3G Capital, explaining that the acquisition would allow the consortium to “invest in and support the company’s ongoing global growth efforts.”
To maintain Heinz’s values, heritage and community connections, the company’s global headquarters will remain in Pittsburgh, and it will continue its philanthropic support of community initiatives and related investments.
The transaction will be financed through a combination of cash provided by Berkshire Hathaway and affiliates of 3G Capital, rollover of existing debt, and debt financing that has been committed by J.P. Morgan and Wells Fargo.
Expected to close in the third calendar quarter of 2013, the transaction is subject to approval by Heinz shareholders, receipt of regulatory approvals and other customary closing conditions.