Heinz, Kraft Foods will merge
PITTSBURGH and NORTHFIELD, Ill. — H.J. Heinz Co. and Kraft Foods Group on Wednesday announced that the two entities will merge to create The Kraft Heinz Company, which will result in the third largest food-and-beverage company in North America, the companies said.
Together, the newly formed company will have eight $1+ billion brands and five brands in the range of $500 million and $1 billion.
"By bringing together these two iconic companies through this transaction, we are creating a strong platform for both U.S. and international growth,” said Alex Behring, chairman of Heinz and the managing partner at 3G Capital. “Our combined brands and businesses mean increased scale and relevance both in the U.S. and internationally. We have the utmost respect for the Kraft business and its employees, and greatly look forward to working together as we integrate the two companies."
Kraft chairman and CEO John Cahill reiterated the significant business opportunities that will arise as a result of the merger. "This combination offers significant cash value to our shareholders and the opportunity to be investors in a company very well positioned for growth, especially outside the United States, as we bring Kraft's iconic brands to international markets,” he said.
Once the transaction closes, Alex Behring will become the chairman of The Kraft Heinz Co.. John Cahill will become vice chairman and chair of a newly formed operations and strategy committee of the board of directors. The board of directors of the combined entity will be comprised of five members appointed by the current Kraft board, as well as the current Heinz Board.
According to a statement, Kraft shareholders will own a 49% stake in the newly formed company; current Heinz shareholders will own 51% on a fully diluted basis. Kraft shareholders will receive stock and a special cash dividend of $16.50 per share.
The Kraft Heinz Co. will be co-headquartered in Pittsburgh and the Chicago area, according to the companies.