Hold The Ketchup? Warren Buffet, 3G Capital Buy Heinz for $23 Billion

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February 14, 2013 ‐ By
AP Photo/Gene J. Puskar

AP Photo/Gene J. Puskar

HJ Heinz, the company behind Heinz ketchup and soups and Weight Watchers Smart Ones meals, is going private after a $23 billion sale to Warren Buffet’s Berkshire Hathaway and investment firm 3G Capital. The entire value of the sale, with debt assumption included, is $28 billion, according to Reuters, making it one of the largest transactions in the food and beverage sector’s history. Heinz stock is up about 20 percent on the news.

The company had been doing very well as a public company, with sales strong ($11.6 billion last year) and a robust stock price. But, CEO William Johnson said, going private will give the company more flexibility and the ability to act with greater speed. Shareholders will get $72.50 per share for their stock.

Warren Buffett. Photo: Richard Drew/AP/dapd

Warren Buffett. Photo: Richard Drew/AP/dapd

Warren Buffett is putting up about $12 billion (is that all?), and adding to the food and beverage investments he’s already made in companies like Dairy Queen and See’s candy. 3G is a Brazilian company that also has investments in the food industry, including Burger King. This deal could spark others in the industry.

Heinz will remain in Pittsburgh post-deal. Heinz was founded in 1869 (its first product was horseradish) and produced its first bottle of ketchup in 1876.

 

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