Berkshire Hathaway, 3G Capital to acquire Heinz for $28bn

An investment consortium comprised of Berkshire Hathaway and 3G Capital has entered into an agreement to acquire American food company HJ Heinz for $28bn, including the assumption of outstanding debt.

Under the terms of the agreement, Heinz shareholders will receive $72.50 in cash for each share of common stock.

The deal will be financed through a combination of cash provided by Berkshire Hathaway and affiliates of 3G Capital, rollover of existing debt, in addition to debt financing that has been committed by JP Morgan and Wells Fargo.

Heinz chairman, president and CEO William R Johnson said that the transaction provides tremendous value to the company’s shareholders.

"As a private enterprise, Heinz will have an opportunity to drive further growth and advance our commitment to providing consumers across the globe with great tasting, nutritious and wholesome products," Johnson added.

Lazard served as the lead financial advisor, and JP Morgan and Wells Fargo also acted as financial advisors to Berkshire Hathaway and 3G Capital.

Following the acquisition, Pittsburgh will be maintained as the food company’s global headquarters by the investment consortium.

3G Capital managing partner Alex Behring said that the company looks forward to working together with Heinz’s employees, suppliers and customers as it invests in and support Heinz’s ongoing global growth efforts.

The transaction is subject to approval by Heinz shareholders, receipt of regulatory approvals and other customary closing conditions, and is expected to close in the third quarter of 2013.

HJ Heinz is a global company that produces and markets foods specialising in ketchup, sauces, meals, soups, snacks and infant nutrition.

Its brand portfolio includes Heinz ketchup, sauces, soups, beans, pasta and infant foods, Ore-Ida potato products, Weight Watchers Smart Ones entrées, T.G.I. Friday’s snacks, and Plasmon infant nutrition.

The US company reported sales of $2.83bn in the second quarter of fiscal 2013, up from $2.81bn in the previous year.

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Image: The $28bn deal is expected to support Heinz’s ongoing global growth efforts. Photo courtesy of H. J. Heinz Company.