Krafts and Heinz mega merger to become US 3rd largest F&B Company

Kraft Foods Group Inc, the maker of Velveeta cheese and Oscar Mayer meats, will merge with ketchup maker H J Heinz Co, owned by 3G Capital and BerkshireHathaway Inc, to become the third largest food company in the US, reported BBC.

With this merger, the group will form the world's fifth-largest food and beverage company.

The deal was engineered by Heinz's owners, the Brazilian investment firm 3G Capital, and billionaire investor Warren Buffett's Berkshire Hathaway.

Current Heinz shareholders will own 51 per cent of the combined company with Kraft shareholders owning a 49 per cent stake.
Kraft's shares rose about 17 percent in premarket trading after the announcement of the deal, which will bring Heinz back to the public market following its takeover two years ago.

The combined company will have revenue of about $28 billion, the companies said in a statement on Wednesday.

Kraft shareholders will get one share in the combined company, to be called the Kraft Heinz Co, and a special cash dividend of $16.50 for every share held.

The dividend, which totals about $10 billion, will be funded by Berkshire and Brazilian private equity firm 3G Capital.

The combined company will have eight brands worth more than $1 billion each and five worth $500 million-$1 billion each, the companies said.

The combined company's brands will include Kraft, Heinz, and Oscar Mayer.

Pic Courtesy: Dispatch.com