HEINZ is buying Kraft Foods Group, creating what the companies say will be the third-largest food 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.
Kraft shareholders will receive stock in the combined company and a special cash dividend of approximately 10 billion dollars (£6.7 billion), or 16.50 dollars per share (£11).
Current Heinz shareholders will own 51 per cent of the combined company, with Kraft shareholders owning a 49 per cent stake.
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 requires approval from Kraft shareholders.
3G Capital also controls Restaurant Brands International Inc, formed when its Burger King business bought Canadian coffee chain Tim Hortons Inc.
Berkshire and 3G Capital will fund the special dividend, which totals about $10 billion.
Alex Behring, Heinz’s chairman and 3G Capital managing partner, will become chairman of the combined company and Kraft chief executive John Cahill will be vice chairman.