Kraft And Heinz Merge Creating 28 Billion Food And Coffee Giant

NORTHFIELD, IL -- Kraft Food Group and H.J. Heinz Co. announced a mega merger that will create the third-largest food and beverage company in North America and fifth-largest in the world.

The deal was engineered by billionaire Warren Buffet's Berkshire Hathaway and Brazilian investment firm 3G Capital, which are investing $10 billion in the combined company. It will be called The Kraft Heinz Co. and generate about $28 billion in annual revenues.

Heinz, which is owned by 3G Capital and Berkshire Hathaway, will control 51% of the combined company. Each Kraft shareholder will get a $16.50 cash dividend, and all will have a combined 49% stake in the new company.

The stake owned by 3G Capital and Berkshire will remain privately held, while the rest of the company's stock will be publicly traded on the Nasdaq.

Buffett, Berkshire Hathaway's chief executive, said: "This is my kind of transaction, uniting two world-class organizations and delivering shareholder value."

Kraft Heinz will have headquarters in both Pittsburgh, where Heinz is based, and the Chicago area, where Kraft is headquartered. Heinz chief executive Bernardo Hees will be hold the same post of the combined group.

Kraft's iconic brands include Jell-O, Maxwell House coffee and Planters peanuts. Heinz is famous for its ketchup, along with Lea & Perrins Worchestershire sauce, Classico tomato sauces and Bagel Bites snacks.

The deal still needs approval from federal regulators and Kraft shareholders, but the boards of both companies unanimously approved it. Closing is set for the second half of the year.