Kraft Foods to merge with HJ Heinz in US$46b deal

Kraft Foods, the owner of several of New Zealand’s favourite brands, is set to merge with HJ Heinz in a $46 billion USD deal. Heinz or Wattie’s is one of New Zealand’s oldest brands with operations dating back 91 years.

Kraft Foods already owns a plethora of much loved brands in New Zealand. From Cadbury to Vegemite, Wattie’s will be a much welcomed edition. Here is a list of all of Kraft Foods brands:

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This deal has been orchestrated by Brazil’s 3G Capital and US investment guru Warren Buffett’s Berkshire Hathaway. Berkshire and 3G will invest US$10b in the new business, which will be known as Kraft Heinz Co. It will have dual headquarters in Pittsburgh and the Chicago area, with current Heinz chief executive officer Bernardo Hees staying at the helm says

With a iconic and long-lived brands already under it’s helm, it can be expected that Kraft Foods have many shareholders. These shareholders will receive 49 per cent of the stock in the combined entity, plus a special cash dividend of US$16.50 a share, the companies said.

Buffett and 3G, the private equity firm, previously teamed up to buy Heinz in 2013 and they cut costs, a strategy they aim to repeat with Kraft.

“3G has squeezed a lot out of Heinz and now they will do the same job at Kraft,” David Turner, an analyst at research firm Mintel, said. “When Buffett invests in a sector, it gives a sign that the sector is ripe for acquisitions. This will flag up other opportunities.”