The king of ketchup and the mother of all snack foods are joining forces.
H.J. Heinz Company and Kraft Foods Group are officially merging, forming the Kraft Heinz Company with combined revenues of $28 billion, the two companies announced early Wednesday.
Investment firm 3G Capital and Warren Buffett's Berkshire Hathaway are orchestrating the merger, bringing Heinz, Kraft, Oscar Mayer, Ore-Ida and Philadelphia all under one roof in a "powerhouse," the companies said, making Kraft Heinz the third-largest food and beverage company in North America and the fifth-largest food and beverage company in the world.
Each Kraft shareholder will get a $16.50 cash dividend, the companies said, while Heinz shareholders will own 51 percent of the new company to Kraft shareholders' 49 percent.
"I am delighted to play a part in bringing these two winning companies and their iconic brands together," Berkshire Hathaway CEO Warrenn Buffett said in a statement. "This is my kind of transaction, uniting two world-class organizations and delivering shareholder value. I'm excited by the opportunities for what this new combined organization will achieve."
As news of the merger broke, Kraft was up 16 percent in pre-market trading around 7 a.m. Wednesday.
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