Thousands Of Layoffs Coming After Buffett Merges Heinz With Kraft, Creating 5th Largest Food Company In The World
Another day, another mega-M&A deal taking advantage of abnormally low bond rates, this time however not involving biotechs or a specialty pharma seeking to purchase a debt-free balance sheet, but one involving the Oracle of Omaha himself, and his Heinz investment, which will merge with Kraft Foods whose market cap was over $40 billion this morning on the news of the merger, and create the third largest food and beverage company in the US, and 5th largest in the world.
And while the resulting company will certainly be an unprecedented food giant, one which leaves the US food industry even more concentrated, here is the rationale behind the deal and the punchline for American workers: “significant synergy opportunities.” Translation: thousands of layoffs imminent.
Details from the press release:
H.J. Heinz Company And Kraft Foods Group Sign Definitive Merger Agreement To Form The Kraft Heinz Company Combination Creates Unparalleled Portfolio of Powerful and Iconic Brands
- Merger will create the 3rd largest food and beverage company in North America and the 5th largest food and beverage company in the world.
- Combined company to be named The Kraft Heinz Company and to be co-headquartered in Pittsburgh and the Chicago area.
- The new company will have revenues of approximately $28 billion with eight $1+ billion brands and five brands between $500 million-$1 billion.
- Stock and cash transaction, with Kraft shareholders to receive a special cash dividend of $16.50 per share upon closing and stock in the combined company representing a 49% stake in the new company.
- Berkshire Hathaway and 3G Capital will invest an additional $10 billion in The Kraft Heinz Company; existing Heinz shareholders will collectively own 51% of the new company.
- Significant synergy opportunities with strong platform for organic growth in North America, as well as global expansion, by combining Kraft’s brands with Heinz’s international platform.
- The Kraft Heinz Company is fully committed to maintaining an investment grade rating; Company plans to maintain Kraft’s current dividend per share, which is expected to increase over time
Full press release:
…click on the above link to read the rest of the article…
