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Heinz and Kraft Foods to join in Kraft Heinz Company

Staff writer |
H.J. Heinz Company and Kraft Foods Group, Inc. have entered into a definitive merger agreement to create The Kraft Heinz Company, forming the third largest food and beverage company in North America.

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Kraft shareholders will receive stock in the combined company and a special cash dividend of $16.50 per share.
Under the terms of the agreement, which has been unanimously approved by both Heinz and Kraft's boards, Kraft shareholders will own a 49% stake in the combined company, and current Heinz shareholders will own 51% on a fully diluted basis.

Kraft shareholders will receive stock in the combined company and a special cash dividend of $16.50 per share. The aggregate special dividend payment of approximately $10 billion is being fully funded by an equity contribution by Berkshire Hathaway and 3G Capital. The proposed merger creates substantial value for Kraft shareholders.

The special cash dividend payment represents 27% of Kraft's closing price as of March 24, 2015. Also, by continuing to own shares of the new combined company, Kraft shareholders will have the opportunity to participate in the new company's long-term value creation potential.

The combination of these food companies joins together two portfolios of beloved brands, including Heinz, Kraft, Oscar Mayer, Ore-Ida and Philadelphia.

Together the new company will have eight $1+ billion brands and five brands between $500 million and $1 billion. The complementary nature of the two brand portfolios presents substantial opportunity for synergies, which will result in increased investments in marketing and innovation.


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