Heinz has been privately held by 3G Capital and Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) since 2011. The two firms paid a total of $11 billion for Heinz. When the transaction closed last week, Berkshire Hathaway had acquired a total stake of 52.5% in Heinz. Buffett and two other Berkshire Hathaway employees will sit on the new company’s board and three 3G Capital executives will also join, including Alex Behring, who becomes chairman. Outgoing Kraft CEO John Cahill also gets a board seat.
Former Kraft shareholders now own 49% of the new company and former Heinz shareholders own 51%. Kraft shareholders also received a special dividend of $16.50 in cash plus one share of the new company for each share of Kraft stock they owned. The aggregate amount of the special dividend is approximately $10 billion and is being funded by 3G Capital and Berkshire Hathaway.
The Kraft Heinz Company now owns a laundry list of some of the world’s best-known brands, including Jell-O, Maxwell House, Planters, and Kraft as well as Heinz’s ketchup, soups, and other products.
Heinz effectively offered $67 a share for Kraft when the deal was announced in March. Since then Kraft stock has risen to close at $88.9 a share on Friday. The stock’s 52-week high is $91.32.
How much the new company is really worth remains to be seen. Consumer product companies like Kraft and Heinz have had trouble keeping up with changes in consumer tastes that now run more to fresh foods rather than pre-packaged fare.
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