(MENAFN- The Journal Of Turkish Weekly) Kraft Foods Group and H.J. Heinz, two of American's largest food companies, announced a merger Wednesday that will create the fifth-biggest food and beverage company in the world.
The Kraft Heinz Company will have revenues of approximately $28 billion, according to a press statement.
Under the terms of the agreement, Heinz shareholders will own a 51 percent stake in the combined company. Kraft will own 49 percent.
Billionaire investor Warren Buffett's Berkshire Hathaway and Brazilian investment firm 3G Capital, which owns Heinz, will invest an additional $10 billion in the company, the statement said.
"I am delighted to play a part in bringing these two winning companies and their iconic brands together," said Buffett, who was one of the engineers of the merger. "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."
The unified companies' brands will include Heinz, Kraft, Oscar Mayer, Ore-Ida and Philadelphia.
Alex Behring, Chairman of Heinz and the Managing Partner at 3G Capital, said the merger will pave to way for even more expansion. "By bringing together these two iconic companies through this transaction, we are creating a strong platform for both U.S. and international growth."
The combined company will be co-headquartered in Pittsburgh and the Chicago area.
The deal is subject to approval by Kraft shareholders and regulators. It is expected to close in the second half of the year.
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