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Berkshire Hathaway and 3G Capital to buy H.J. Heinz for $28 billion

Staff writer |
H.J. Heinz Company agreed to be sold to Berkshire Hathaway and 3G Capital for $28 billion. The transaction is is expected to close in the third calendar quarter of 2013.

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Under the agreement, which has been unanimously approved by Heinz’s Board of Directors, Heinz shareholders will receive $72.50 in cash for each share of common stock they own, including the assumption of Heinz’s outstanding debt.

The per share price represents a 20% premium to Heinz’s closing share price of $60.48 on February 13, 2013, a 19% premium to Heinz’s all-time high share price, a 23% premium to the 90-day average Heinz share price and a 30% premium to the one-year average share price.

"The Heinz brand is one of the most respected brands in the global food industry and this historic transaction provides tremendous value to Heinz shareholders. ith Heinz stock recently at an all-time high and 30 consecutive quarters of organic topline growth, Heinz is being acquired from a position of strength," said Heinz chairman, president and CEO William R. Johnson.

"Heinz has strong, sustainable growth potential based on high quality standards, continuous innovation, excellent management and great tasting products. Their global success is a testament to the power of investing behind strong brand equities and the strength of their management team and processes. We are very pleased to be a part of this partnership," said Warren Buffett, chairman and CEO of Berkshire Hathaway.

"We have great respect for the Heinz brands and the strong business that management and its employees operate around the world. We approached Heinz to explore how we might work together to expand the value of this storied brand. We fully recognize Heinz’s value and heritage and look forward to working together with Heinz’s employees, suppliers and customers as we invest in and support the company’s ongoing global growth efforts," said Alex Behring, managing partner at 3G Capital.

The transaction will be financed through a combination of cash provided by Berkshire Hathaway and affiliates of 3G Capital, rollover of existing debt, as well as debt financing that has been committed by J.P. Morgan and Wells Fargo. The transaction is is expected to close in the third calendar quarter of 2013.


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