Heinz on the menu for Buffett
The two companies will pay HJ Heinz shareholders US$72.50 per share in cash, a 20% premium on Heinz's Wednesday (13 February) closing price.
"Heinz has strong, sustainable growth potential based on high quality standards, continuous innovation, excellent management and great tasting products," Buffett, the chairman of Berkshire, said in a statement.
"Their global success is a testament to the power of investing behind strong brands and the strength of their management team and processes," he added.
With US$11.6bn in global sales last year, Heinz is one of the largest US food companies.
It owns top prepared food brands such as ABC sauces in Asia, Quero sauces in Latin America, Golden Circle in Australia, OreIda frozen potatoes sold globally, Honig in the Netherlands, Plasmon baby food in Italy, and Classico pasta sauces and Smart Ones low-calorie frozen foods in North America.
But its main products are the iconic Heinz ketchup, sold globally through markets and fast-food vendors and one of its earliest favorites in the United States, Heinz baked beans.
"The Heinz brand is one of the most respected brands in the global food industry and this transaction provides tremendous value to Heinz shareholders," said Heinz chairman and chief executive William Johnson.
"With Heinz stock recently at an all-time high and 30 consecutive quarters of organic growth, Heinz is being bought when it's in a position of strength.
"As a private enterprise, Heinz will have an opportunity to drive further growth and advance its commitment to providing consumers with great tasting, nutritious and wholesome food products," Johnson added.
Buffett's firm has been searching for lucrative ways to invest its more than US$40bn cash hoard in an environment of low interest rates and intense competition from other cash-rich investment funds.
Berkshire and 3G pledged to keep Heinz as it is, with its base in Pittsburgh, Pennsylvania.
The deal is subject to approval by Heinz shareholders, and is expected to be completed later this year.
Source: AFP via I-Net Bridge
Source: I-Net Bridge
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