Warren Buffett, 3G Capital to buy HJ Heinz Co for $23 bn
15 Feb 2013
Billionaire investor Warren Buffett has teamed up with Brazilian private equity firm 3G Capital to acquire global US foods giant HJ Heinz Co, for $23 billion, plus a $5-bn debt, in the biggest acquisition ever in the food industry
Under the $28-billion price tag, which includes assumption of debt, Buffett's investment company Berkshire Hathaway and Brazilian billionaire and financier Jorge Paulo Lemann's 3G will pay $72.50 per share in cash, a 19 per cent premium to Heinz's previous all-time high share price and a 20 per cent premium to its yesterday closing price.
Berkshire and 3G will invest more than $4 billion in common equity and Berkshire will also help finance the deal by buying $8 billion in preferred stock with the rest of the purchase price being financed through loans committed by JP Morgan and Wells Fargo.
Berkshire and 3G will both hold 50 per cent equity stakes in Heinz, but 3G, which also owns Burger King, will operate the business.
The deal has been approved by Heinz's board and is expected to close in the third quarter of this year after receiving shareholders and regulatory approval.
Berkshire and 3G have agreed to keep the company's headquarters at Pittsburgh as, but sre silent on the future top management of the company.