Billionaires Buffett and Jorge Paulo Lemann buy Heinz for US$23b
Buffett's Berkshire Hathaway conglomerate and Lemann's buyout firm 3G Capital, will pay US$72.50 a share, a 20 per cent premium over Wednesday's closing price of US$60.48.
Warren Buffett and the Brazilian billionaire Jorge Paulo Lemann have agreed to buy the food company HJ Heinz for US$23 billion as they increased their bets on consumer products.
The buyers, Buffett's Berkshire Hathaway conglomerate and Lemann's buyout firm 3G Capital, will pay US$72.50 a share, a 20 per cent premium over Wednesday's closing price of US$60.48.
Berkshire would spend about US$12 billion to US$13 billion for the maker of soups, ketchup and baked beans, Buffett told CNBC.
"Heinz has strong, sustainable growth potential based on high quality standards, continuous innovation, excellent management and great-tasting products," he said.
The deal will also be financed with cash from 3G affiliates, plus the rollover of existing debt, and is valued at about US$28 billion including debt, according to a statement.
Buffett has been seeking deals after the cash pile at Berkshire Hathaway climbed to more than US$45 billion. He has previously wagered on consumer products through equity investments in Coca-Cola, and he helped finance the confectionery firm Mars' purchase of the chewing gum maker Wrigley.