Kraft and Heinz Team Up in Megamerger
Kraft Foods and H.J. Heinz Co., two icons of the American dinner table, are merging in a blockbuster $40 billion deal that will create the fifth-largest food and beverage company in the world, said Dana Cimilluca in The Wall Street Journal. The combined company, to be called Kraft Heinz, “will have revenues of about $28 billion” and include wellknown brands like Jell-O, Weight Watchers, Maxwell House, Oscar Meyer, and Planters. Heinz shareholders will hold a 51 percent stake in the combined company; Kraft shareholders will hold 49 percent. Kraft shareholders will also receive a special cash dividend of $16.50 per share.
Billionaire Warren Buffett “played a significant role in bringing the deal together,” said David Gelles in The New York Times. Buffett’s Berkshire Hathaway, along with Brazilian investment firm 3G Capital, bought Heinz two years ago. Kraft has struggled in recent years to adapt to changing consumer tastes, and in 2014 its profits fell 62 percent to $1 billion. But Buffett and 3G executives say they hope to find savings of $1.7 billion annually by the end of 2017 through cost cuts and efficiencies of scale. “This is my kind of transaction,” said Buffett, “uniting two world-class organizations and delivering shareholder value.”
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