Feb. 14 - Berkshire Hathaway and 3G Capital agree to buy Heinz for $28 billion in a mega food buyout. Conway G. Gittens reports.
Warren Buffett is pouring it on thick. His Berkshire Hathaway - teaming up with private equity firm 3G Capital - buying leading ketchup maker Heinz. The $28 billion price tag includes more than $23 billion in cash. Heinz CEO William Johnson: SOUNDBITE: WILLIAM R. JOHNSON, CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, H. J. HEINZ COMPANY, (ENGLISH) SAYING: "The board finally concluded that the value opportunity for the shareholders was just too great to pass up. I mean, this is the largest transaction in the history of food business." Heinz shareholders will get a 19 percent premium from the all-time share price set the day before - sending the stock to a new record on Thursday as Heinz moves towards becoming a private company. SOUNDBITE: WILLIAM R. JOHNSON, CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, H. J. HEINZ COMPANY, (ENGLISH) SAYING: "As a private company we can be even more focused, more competitive, more nimble, and benefit from much faster decision-making." For 3G, Heinz builds on its food portfolio, including fast-food chain Burger King. Buffett gets "his kind of deal", agreeing to put up about $12 billion to $13 billion in cash, adding to his storied investments. Berkshire and 3G would be equal equity partners. Alex Behring, co founder and managing partner of 3G Capital explains why the deal combines 3G's ambitions in the food industry with Buffett's hunt for growth. SOUNDBITE: ALEX BEHRING, CO-FOUNDER, MANAGING PARTNER, BOARD MEMBER, 3G CAPITAL, (ENGLISH) SAYING: "It's a truly global brand, it has incredible consumer perception around the world, and it's really a powerhouse brand. Number two, the enviable position the company is in, the position that Heinz is in, in the food industry, on the global basis, being, you know, generally, number one or number two in a variety of categories, they are attractive, growing, that, obviously, brings me to the third reason that we are so excited to do this, is the people." Wall Street, finding this deal too tasty to ignore. And now investors are looking at the menu - wondering which food company may be next to be gobbled up.