Heinz, Kraft agree to merge, forming a new food giant

Fortune

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.”
[fortune-brightcove videoid=4119235041001]

The new company will be called The…

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