HJ Heinz, owned by Warren Buffett’s Berkshire Hathaway [fortune-stock symbol=”BRK-A”], is to merge with Kraft Foods Group [fortune-stock symbol=”KRFT”], creating a new giant in the food industry and paving the way for Heinz to return to the stock market, the two companies said Wednesday.
Heinz is to buy 51% of Kraft in a deal brokered by Berkshire and the Brazilian-based private equity company 3G. Kraft shareholders will get a $10 billion special dividend ($16.50 a share) under the deal, the rumor of which helped propel Kraft’s shares 16% in after-hours trading Tuesday. The dividend alone equates to 27% of Kraft’s market value as of the close of Tuesday’s trading.
“This is my kind of transaction, uniting two world-class organizations and delivering shareholder value,” Buffett said in the statement. “I’m excited by the opportunities for what this new combined organization will achieve.”
The new company will be called The…
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