US food companies Heinz and Kraft have announced a tie-up that will create North America's third largest food and beverage company. The deal has received the blessings of the companies' main shareholders.
The two US food giants said in a joint statement issued on Wednesday that Heinz's current shareholders would have a 51 percent stake in the new Kraft Heinz Company, with the rest to be held by Kraft's shareholders.
Heinz's controlling shareholders, US billionaire investor Warren Buffet and Brazilian investment firm 3G Capital, would reinvest $10 billion dollars (9.13 billion euros) in the new group, the statement said. This would make it possible to offer Kraft shareholders a special dividend of $16.50 along with their 49 percent stake in the new company.
The two US food companies, respectively known as the makers of Heinz Ketchup and Oscar Meyer Weiners, said they expected "significant synergy opportunities with a strong platform for organic growth in North America." In addition, they were hoping for "global expansion" by combining Kraft's brands with Heinz's international platform.
The merged company is expected to garner revenues of about $28 billion from its eight brands, which according to Kraft would make it the fifth largest food company in the world. Global market leader is Swiss-based Nestle with sales to the tune of $95 billion.
uhe/kc (AFP, Reuters, dpa)