Pittsburgh, Penn. and Chicago, Ill. – H.J. Heinz Company and Kraft Foods Group Inc. announced today that the two companies are merging to create The Kraft Heinz Company.
The merger will create the third-largest food and beverage company in North America with revenues of US$28 billion. It will be the fifth-largest food company in the world. The deal is being valued at US$100 billion.
The new company will own Kraft, Heinz, Oscar Mayer, Jell-O, Kool-Aid, Ore-Ida and other brands. Combined the new company will have eight US$1-billion+ brands and five brands between US$500 million and US$1 billion.
Warren Buffett’s Berkshire Hathaway and Brazilian investment firm 3G Capital – owners of Heinz – engineered the merger. 3G Capital is the company also behind the takeover of Tim Hortons by Burger King in 2014.
Boards on both companies approved the merger, which is to close later this year. CBC.ca says 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 US$10 billion or US$16.50 per share.
The new company will be co-headquartered in Pittsburgh and Chicago.