Berkshire Hathaway Partners for $23B Heinz Purchase

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

[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.

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