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(Image source: Bloomberg)
BY JESSICA REESE ANCHOR MEGAN MURPHY
Who knew ketchup would run ya $28 billion? Well, the only ones who can afford it did:
billionaires Warren Buffett and Jorge Paulo Lemann.
Fortune reports Buffett’s Berkshire Hathaway and Lemann’s 3G Capital will buy Heinz for
$72.50 a share. That’s almost a 20 percent increase since Wednesday’s price of $60.48.
This price is at an all-time high for the condiment king since it hit bottom in 2009.
But the duo’s deal might actually not be that big of a surprise, or at least -- it
makes big sense.
The New York Times points out “Heinz fits Mr. Buffett’s deal criteria almost to a
T. It has high-profile brand recognition” and “3G Capital owns a majority stake in
a company whose business is complementary to Heinz’s: Burger King.”
This may be one of the largest buyouts for the food industry. The Wall Street Journal
compares it to the $25 billion RJR Nabisco deal, and the $19 billion Kraft/Cadbury deal.
But, even those are not on the same level.
The Financial Times explains this deal could cause more merger and acquisitions in the
food industry. But, with these price tags, it may also make it more difficult for other
financial buyers to make similar mergers.
The deal would not close until the last three months of the year. And, Heinz’s headquarters
will remain in Pittsburgh.