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HJ Heinz Sold For $28 Billion to Berkshire Hathaway and 3G Capital

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HJ Heinz Sold For $28 Billion to Berkshire Hathaway and 3G Capital

HJ Heinz Sold For $28 Billion to Berkshire Hathaway and 3G Capital
February 20
08:49 2013

HJ Heinz Company is being acquired by an investment consortium comprised of Berkshire Hathaway and 3G Capital in a transaction valued at $28 billion, including the assumption of the global food group’s outstanding debt. The acquisition is the largest ever in the food industry. Following the transaction, Heinz will remain headquartered in Pittsburgh as a private company.

“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,” says Heinz Chairman, President and CEO William R. Johnson. “With Heinz stock recently at an all-time high and 30 consecutive quarters of organic top line growth, Heinz is being acquired from a position of strength. As a private enterprise, Heinz will have an opportunity to drive further growth and advance our commitment to providing consumers across the globe with great tasting, nutritious and wholesome products,”

Specializing in ketchup, sauces, meals, soups, snacks and infant nutrition, Heinz is one of the world’s leading food groups. In its 2012 financial year, on a continuing operations basis, Heinz delivered:record sales of $11.6 billion, driven by 16% organic sales growth in emerging markets (41% reported) and growth in its top 15 brands and global ketchup. Net income increased by 19% to $1.09 billion.

Warren Buffett, Chairman and CEO of Berkshire Hathaway, says: “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.”

Alex Behring, Managing Partner at 3G Capital, comments: “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.”

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 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.

Berkshire Hathaway owns and invests in leading businesses across a variety of industries, including numerous iconic brands. 3G Capital is a global investment firm focused on long-term value creation, with a particular emphasis on building and expanding great brands and businesses.

The transaction is subject to approval by Heinz shareholders, receipt of regulatory approvals and other customary closing conditions, and is expected to close in the third (calendar) quarter of 2013.


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