Two of America’s biggest household names, Kraft and Heinz, are to merge to create the world’s number five food group.
Heinz, co-owned by Warren Buffet’s Berkshire Hathaway and Brazil’s 3G Capital, will take 51% of the new company, Kraft shareholders 49%. Heinz’s boss Bernardo Hees will take the helm.
A more than nine-billion euro sweetener is thrown in for Kraft shareholders in the form of an exceptional dividend.
Kraft shares took off on the news that the company might be poised to stimulate moribund demand for its products and return to profit after losing money in the last quarter. Cost cutting at Heinz was Buffet and his partners’ method of restoring profitability; analysts expect the same approach at Kraft.
The combined firm has a turnover of 25.4 billion euros.