US food giant Heinz is to merge with Kraft Foods Group, creating what the companies say will be the third-largest food and beverage company in the US, behind PepsiCo and Nestle. The new company will be called the Kraft Heinz Company and will be co-headquartered in Pittsburgh and the Chicago area, combining brands including company’s […]
US food giant Heinz is to merge with Kraft Foods Group, creating what the companies say will be the third-largest food and beverage company in the US, behind PepsiCo and Nestle.
The new company will be called the Kraft Heinz Company and will be co-headquartered in Pittsburgh and the Chicago area, combining brands including company’s brands will include Kraft, Heinz, and Oscar Mayer.
The company, which Heinz says will be the fifth largest food and drink firm in the world, will have brands including Philadelphia, famous for soft cheese, and frozen potato-product company Ore-Ida.
HP Sauce and Lea & Perrins, which produces Worcestershire sauce, are Kraft Heinz brands likely to be familiar to people in the UK.
The deal was engineered by Heinz’s owners, the Brazilian investment firm 3G Capital, and billionaire investor Warren Buffett’s Berkshire Hathaway.
The combined company, to be led by Heinz Chief Executive Bernardo Hees, will have revenue of about $28 billion, the companies said in a statement on Wednesday.
Kraft has been battling sluggish demand for packaged food products in the United States.
The combined company is expected to save about $1.5 billion annually by the end of 2017, the companies said.
Warren Buffett, Berkshire Hathaway chief executive, said: “I am delighted to play a part in bringing these two winning companies and their iconic brands together.
“This is my kind of transaction, uniting two world-class organisations and delivering shareholder value. I’m excited by the opportunities for what this new combined organisation will achieve.”
Alex Behring, chairman of Heinz and the managing partner at 3G Capital, said: “By bringing together these two iconic companies through this transaction, we are creating a strong platform for both US and international growth.”
