Berkshire Hathaway, 3G Capital to acquire Heinz
Warren Buffett and his Berkshire Hathaway investment conglomerate have found another American icon w…Warren Buffett and his Berkshire Hathaway investment conglomerate have found another American icon worth buying: H. J. Heinz. The price tag: $23 billion, making it the biggest food industry deal ever.
Although best known for Heinz ketchup, the Pittsburgh-based food giant has a number of prominent frozen food lines, including Ore Ida potato products, Bagel Bites and entrees licensed under the TGI Friday's and Weight Watchers/Smart Ones brands.
Buffett is teaming up with 3G Capital Management, a Brazilian-backed investment firm that owns a majority stake in Burger King. Under the terms of the deal, Berkshire and 3G will pay $72.50 a share, about 20% above Heinzs closing price on Feb. 13. Including debt, the transaction is valued at $28 billion.
"This is my kind of deal and my kind of partner," Buffett told CNBC on Feb. 14. "Heinz is our kind of company with fantastic brands." He said had a file on Heinz dating back to 1980. But the genesis of the deal actually lies with 3G, an investment firm backed by several wealthy Brazilian families, a person said to have with direct knowledge of the matter told The New York Times.
One of 3Gs principal backers, Jorge Paulo Lemann, brought the idea of buying Heinz to Berkshire about two months ago, this person told the Times. Buffett agreed, the Times said, and the two sides approached Heinz CEO William R. Johnson, about buying the company. "We look forward to partnering with Berkshire Hathaway and 3G Capital, both greatly respected investors, in what will be an exciting new chapter in the history of Heinz," Johnson said.
