Warren Buffett & 3G Capital Swoop Up Heinz in $23 Billion Deal

Billionaire Warren Buffett and private equity firm 3G Capital are set to buy HJ Heinz Co. for $23.2 billion — cash. The deal ends the iconic ketchup company’s long history of independence and satisfies both Buffet’s thirst for growth and 3G’s want for expansion into the food industry.

Compared to yesterday’s closing price of $60.48, buyers will pay $72.50 a share. Warren Buffett’s Berkshire Hathaway will spend close to $13 billion on the deal, Buffett informed CNBC. Heinz valued the transaction at $28 billion, including debt assumption, claiming it’s the largest deal made in industry history.

The move is promising for both Berkshire Hathaway and 3G Capital. Heinz’s name has the kind of staying power that takes decades to create — one founded on both consumer trust and product quality. The brand has been able to raise their prices during the economy’s more difficult slumps, while still maintaining profit. “There isn’t going to be another Heinz brand,” said Brian Sozzi, chief equities analyst for NBG Productions. “It has a durable competitive advantage.”

Heinz CEO William Johnson stated during a news conference that making Heinz private would enable the company to make crucial decisions more quickly, as the need to report quarterly earnings would be eliminated. Johnson confirmed that Heinz corporate headquarters would remain in Pittsburgh and that the only changes the city should witness is the company’s absence from newspaper stock pages.

 H/T Bloomberg + PicThx BizWk