Ketchup-maker Heinz (NYSE:HNZ) will be acquired for more than $23 billion by 3G Capital and Berkshire Hathaway (NYSE:BRK.A, BRK.B), 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) 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.
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.