Warren Buffett Part of Group to Buy Heinz in $23 Billion Deal

Heinz companyNEW YORK (AP) - H.J. Heinz Co. (HNZ) has agreed to be acquired by an investment group including billionaire investor Warren Buffett in a deal valued at $23.3 billion.

The ketchup company says it's the largest deal ever in the food industry. Heinz shareholders will receive $72.50 in cash for each share of common stock they own. The transaction value includes the assumption of Heinz's debt. Based on Heinz's number of shares outstanding, the deal is worth $23.3 billion excluding debt.

"It's our kind of company," Buffett said in an interview on CNBC, noting its signature ketchup has been around for more than a century. "I've sampled it many times."

In addition to its ketchup, Heinz makes Classico spaghetti sauces, Ore-Ida potatoes and Smart Ones frozen meals. The company was founded by Henry John Heinz and his neighbor L. Clarence Noble in 1869. The pair's first product was grated horseradish, bottled in a clear glass to showcase its purity. The first ketchup was introduced in 1876; the company says it was the country's first commercial grade ketchup.

Last year, Heinz says it had sales of $11.6 billion, with ketchup and sauces accounting for just under half of that. Given the saturated North American market, the company has increasingly looked to emerging markets for growth. In 2013, emerging markets are expected to account for a quarter of the company's sales.

Berkshire Hathaway (BRK-A, BRK-B) and 3G Capital, the investment firm which also bought Burger King in 2010, say Heinz will remain headquartered in Pittsburgh.

The per-share price for the deal represents a 20 percent premium to Heinz's closing price of $60.48 on Wednesday. Heinz said the deal was unanimously approved by its board. Buffett said on CNBC that Berkshire is putting $12 billion to $13 billion into the deal. But he noted that Berkshire will still have room to make more acquisitions, noting that its businesses continually replenish its cash supply.

"Anytime we see a deal is attractive and it's our kind of business and we've got the money, I'm ready to go," Buffett said.

The deal is expected to close in the third quarter.


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11 Comments

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nthereoff

Who cares? The rich invest Billions and I invest hundrens and thats way it is. Saw the movie ARGO yesterday. And really enjoy it. Thank God for the Canadains

February 15 2013 at 8:38 AM Report abuse rate up rate down Reply
lchap17156

Theresa sold the family out probably with the help of John Kerry. The Heinz's are all rolling over in their graves.

February 15 2013 at 12:26 AM Report abuse rate up rate down Reply
PAMELA WORM

I'll bet Mr. and Mrs. John Kerry will be happy about this deal. Mrs. John Kerry is "Mrs. Heinz ketsup." Lucky people, wealthy people.

February 14 2013 at 2:30 PM Report abuse rate up rate down Reply
Lala

Sorry for posting so many times I didn't mean to although it is a great video. Mr. Buffett could change the world if he wanted to.

February 14 2013 at 1:50 PM Report abuse rate up rate down Reply
1 reply to Lala's comment
JIM

for the worse. oh wait was he the one who supported Obamas hate the business people and the middle class

February 14 2013 at 2:45 PM Report abuse rate up rate down Reply
Lala

Sorry didn't mean to post so many times though it is a rockin' video. Mr. Buffett could change the world if he wanted to.

February 14 2013 at 1:49 PM Report abuse rate up rate down Reply
Lala

http://www.youtube.com/watch?v=HnN6FFjZBZQ

February 14 2013 at 1:48 PM Report abuse rate up rate down Reply
Lala

http://www.youtube.com/watch?v=HnN6FFjZBZQ

February 14 2013 at 1:47 PM Report abuse rate up rate down Reply
Lala

http://www.youtube.com/watch?v=HnN6FFjZBZQ

February 14 2013 at 1:47 PM Report abuse rate up rate down Reply
may191919

A wonderful game of cronieism played by liberal demegogs. And our 99% is still busy falling in love with those characters.

February 14 2013 at 1:29 PM Report abuse +1 rate up rate down Reply
TB

The Gigolo has now solidified his position as a One Percenter.

February 14 2013 at 1:20 PM Report abuse +1 rate up rate down Reply