Berkshire Hathaway Partners for $23B Heinz Purchase

by Christopher Freeburn | February 14, 2013 12:36 pm

Berkshire Hathaway Partners for $23B Heinz Purchase

heinz ketchup sign building 630 300x225 Berkshire Hathaway Partners for $23B Heinz Purchase[1]Ketchup-maker Heinz (NYSE:HNZ[2])¬†will be acquired for more than $23 billion[3] by 3G Capital and Berkshire Hathaway (NYSE:BRK.A[4], BRK.B[5]), Warren Buffett’s famed investment firm.

Not surprisingly, shares of Heinz soared almost 20% in Thursday midday trading.

Under the terms of the deal, Heinz shareholders will be paid $72.50 a share. Including debt, the deal has a total value of about $28 billion. It marks the largest acquisition by Berkshire Hathaway since its 2009 purchase of Burlington Northern Santa Fe railroad for $25 billion, The Wall Street Journal noted.

Berkshire Hathaway rarely partners with other players in its acquisitions. However, in media interviews, Buffett said 3G Capital — which took Burger King (NYSE:BKW[6]) private for $4 billion in 2010 (it’s now public again) — would run Heinz under their deal. Berkshire Hathaway provided between $12 billion and $13 billion in cash to finance the purchase.

In his annual letter last year, Buffett indicated his intention to make more acquisitions[7].

Heinz’s board of directors has unanimously approved the deal, which is expected to be finalized in the third quarter of this year, if regulators give the final OK.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2012/10/heinz-ketchup-sign-building-630.jpg
  2. HNZ: http://studio-5.financialcontent.com/investplace/quote?Symbol=HNZ
  3. will be acquired for more than $23 billion: http://online.wsj.com/article/SB10001424127887323478004578303733925078030.html
  4. BRK.A: http://studio-5.financialcontent.com/investplace/quote?Symbol=BRK.A
  5. BRK.B: http://studio-5.financialcontent.com/investplace/quote?Symbol=BRK.B
  6. BKW: http://studio-5.financialcontent.com/investplace/quote?Symbol=BKW
  7. make more acquisitions: http://investorplace.com/2012/08/buffett-still-cant-find-a-big-buyout-bargain/

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