H.J. Heinz Goes Private in $28 Billion Deal with Berkshire Hathaway, 3G Capital Management

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Researched by Industrial Info Resources (Sugar Land, Texas)--In the largest Food and Beverage Industry transaction on record, H.J. Heinz Company (NYSE:HNZ) (Pittsburgh, Pennsylvania) has agreed to be acquired by Berkshire Hathaway (NYSE:BRK-A) (Omaha, Nebraska) and 3G Capital Management for $28 billion, including debt. Shareholders will receive $72.50 per share in cash. The per share price represents a 20% premium to Heinz's closing share price of $60.48 on February 13, 2013, a 19% premium to Heinz's all-time high share price, a 23% premium to the 90-day average Heinz share price, and a 30% premium to the one-year average share price.

Berkshire and 3G each will contribute about $4 billion in cash to pay for the deal, with Berkshire also paying $8 billion for preferred shares. The rest of the cost will be covered by debt financing.

Heinz headquarters will remain in Pittsburgh, where it has been for more than 120 years.

According to Industrial Info, Heinz operates more than a dozen large food manufacturing and distribution facilities across North America. Industrial Info is currently tracking nearly $20 million in capital expenditures within those facilities.

3G Capital Management is a Brazilian-backed investment firm. In 2010, 3G took Burger King Holdings private in a leveraged buyout valued at about $3.3 billion. Eighteen months after taking it private, 3G sold shares of Burger King back to the public, but it still retains majority ownership of the company. 3G was also instrumental in the multibillion-dollar merger of the Brazilian-Belgian beer giant InBev with Anheuser-Busch.

Berkshire is a holding company owning subsidiaries engaged in diverse business activities. Led by Warren E. Buffet, it has a portfolio of iconic U.S. brands, including Fruit of the Loom, Dairy Queen and General Electric (NYSE:GE) (Fairfield, Connecticut). Berkshire's class A stock was also up slightly, rising 0.64% to $148,691 a share.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.