Warren Buffett and the equity firm 3G Capital wish to merge Kraft Foods and Heinz.From Silvia Liebrich
The US investor Warren Buffett has threaded a new billion deal: Together with the Brazilian equity firm 3G Capital likes of billionaire from the food company Kraft Foods and the ketchup maker Heinz one of the largest food companies in the World forms. This decision was announced both investors. The merger of the companies is one of the biggest in the food industry. The new company will be with a turnover of over 28 billion and approximately 54 000 employees in fifth. Remains the undisputed leader of the Swiss Nestlé $ 100 billion in annual sales.
Say in the merged company called “The force Heinz Company” shall have reported to the Heinz shareholders. Kraft shareholders will therefore hold 49 percent of the combined company, the Heinz-owner with 51 percent. The shareholders of force are in addition to shares of the new company a cash dividend of 16.50 dollars per share obtained, which is funded by the Heinz-owners 3G Capital and Berkshire Hathaway.
Buffet and 3G Capital pull together more often together. The major investor and private equity firm’ve been instrumental in the merger of the Hamburg company Burger King and the Canadian fast food chain Tim Hortons in the past year. “This is my way of a transaction: two world-class companies to unite and to create value for shareholders,” writes buffet in a notice on its latest deal. According to Forbes of Americans with an estimated personal fortune of nearly $ 73 billion currently the third richest man in the world.
There is not the first deal that causes investors to pull together
3G Capital is also specialized in investments in the food industry and known for its not just squeamish dealing with companies in which it invests. Wherever the employees of the private equity firm arise, let hard cuts in costs and in staffing usually not long in coming. As the driving force behind the company applies the Swiss-Brazilian billionaire Jorge Paulo Lemann, who was among other things, a major shareholder in the largest international brewery group Anheuser-Busch InBev, is one of about the German brand Beck’s. His father had emigrated to Brazil in the 1930s and had been there with the cocoa trade a fortune. Lemann was active early on as an investor, especially in the beer sector. Since then he has been living in Switzerland and is considered one of the wealthiest citizens of the country.
With a fusion of Kraft Foods and Heinz new move comes in the American food market. Many major manufacturers, including force, complain of falling profits and stagnant sales. Force is finished products such as; ago, but also snacks and drinks “Macaroni & Cheese amp”. Buffett’s Berkshire Hathaway investment company and the financial investor 3G Capital took over the ketchup producer only two years ago for $ 23 billion. The origin of the former family business dates back to the second half of the 19th century. Today one of the most famous brands in the world – – founder Henry John Heinz, son of German immigrants, the legendary Heinz tomato ketchup was invented in 1876 in the State of Pennsylvania
The stock market reacted enthusiastically: The shares of force. make significant gains
observers assume that the concentration of Kraft Foods will be associated with dramatic savings and a restructuring of the Group. This is also confirmed buffet and 3G Capital. Accordingly, the costs should be reduced by the end of 2017 by 1.5 billion dollars.
CEO Tony Vernon has abandoned his post early last December. Since then Executive Chairman John Cahill manages the business at Kraft Foods, it will be given an important post in the new group. However, moves to the top of the previous boss Bernardo Hees Heinz-
From the merger is only power Foods in North America affected. Three years ago the European and other parts of the former power Foods Group’s international business were split off into a separate company called Mondelez. In terms of sales bundles Mondelez the lion’s share of the original company. While sales of $ 34 billion, almost twice as high as that of the remaining North American power-Foods offshoot, which is now merged with Heinz. Mondelez is known in Germany for brands such as Milka and Philadephia. In our range but are also products that are still sold under the brand name power, but have nothing to do directly with the US group.
In New York jumped the price of the force Foods- share of 34 percent up to 82 dollars. Thus, the value of the company amounted to 47 billion dollars. The transaction is expected in the second half of the year. However, force shareholders and antitrust authorities must still approve the merger.