Buffett's firm dips into US$23b Heinz deal
Source: Agencies |
February 16, 2013, Saturday
|
Print Edition
Print Edition
BILLIONAIRE Warren Buffett, the most closely watched investor in America, is putting his money in ketchup, agreeing on Thursday to buy H.J. Heinz Co for US$23.3 billion in the richest deal ever in the food industry.
For his money, the Oracle of Omaha gets one of the oldest and most familiar American brands, one that's in refrigerators and kitchen cupboards all over the US.
The deal is intended to help Heinz accelerate its expansion from a dominant American name into a presence on grocery shelves worldwide. The Pittsburgh-based company also makes baked beans, pickles, vinegar, Classico pasta sauces and Ore-Ida potatoes, as well as sauces suited to regional tastes around the world.
Buffett's investment firm, Berkshire Hathaway, is teaming with 3G Capital to buy Heinz, which had long been a subject of takeover speculation. New York-based 3G is best known for its acquisition of Burger King and its role in the deal that created Anheuser-Busch InBev, the world's biggest beer maker.
The deal is expected to close in the third quarter.
The plans to take Heinz private apparently began to take shape on a plane in early December. In an interview with CNBC, Buffett said he was approached at that time by Jorge Lemann, a fellow billionaire and a co-founder of 3G. The two had known each other since serving on the board of Gillette about 12 years ago.
Soon after that encounter, two of 3G's managing partners traveled to Pittsburgh to have lunch with Heinz CEO William Johnson to discuss buying the 144-year-old company.
"The offer was such that I simply felt compelled to take it to my board," Johnson said at a news conference on Thursday.
Over the next several weeks, Johnson said, the board worked out details of the transaction.
Berkshire is putting up US$12.12 billion in return for half of the equity in Heinz, as well as US$8 billion of preferred shares that pay 9 percent, according to a filing with the Securities and Exchange Commission. 3G Capital will run Heinz, and Berkshire will be the financing partner.
By taking the company private, Johnson said, Heinz will have the flexibility to react more quickly without the pressure of satisfying investors with quarterly earnings reports.
Heinz's push to go global began over a decade ago, and about two-thirds of its revenue already comes from outside the US. The company is focusing on emerging markets, where it expects to get about a quarter of its sales this year.
For his money, the Oracle of Omaha gets one of the oldest and most familiar American brands, one that's in refrigerators and kitchen cupboards all over the US.
The deal is intended to help Heinz accelerate its expansion from a dominant American name into a presence on grocery shelves worldwide. The Pittsburgh-based company also makes baked beans, pickles, vinegar, Classico pasta sauces and Ore-Ida potatoes, as well as sauces suited to regional tastes around the world.
Buffett's investment firm, Berkshire Hathaway, is teaming with 3G Capital to buy Heinz, which had long been a subject of takeover speculation. New York-based 3G is best known for its acquisition of Burger King and its role in the deal that created Anheuser-Busch InBev, the world's biggest beer maker.
The deal is expected to close in the third quarter.
The plans to take Heinz private apparently began to take shape on a plane in early December. In an interview with CNBC, Buffett said he was approached at that time by Jorge Lemann, a fellow billionaire and a co-founder of 3G. The two had known each other since serving on the board of Gillette about 12 years ago.
Soon after that encounter, two of 3G's managing partners traveled to Pittsburgh to have lunch with Heinz CEO William Johnson to discuss buying the 144-year-old company.
"The offer was such that I simply felt compelled to take it to my board," Johnson said at a news conference on Thursday.
Over the next several weeks, Johnson said, the board worked out details of the transaction.
Berkshire is putting up US$12.12 billion in return for half of the equity in Heinz, as well as US$8 billion of preferred shares that pay 9 percent, according to a filing with the Securities and Exchange Commission. 3G Capital will run Heinz, and Berkshire will be the financing partner.
By taking the company private, Johnson said, Heinz will have the flexibility to react more quickly without the pressure of satisfying investors with quarterly earnings reports.
Heinz's push to go global began over a decade ago, and about two-thirds of its revenue already comes from outside the US. The company is focusing on emerging markets, where it expects to get about a quarter of its sales this year.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
