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Beanz meanz Buffett after $27b deal


Billionaire Warren Buffett's investment powerhouse Berkshire Hathaway and 3G Capital have announced they will take over US tomato sauce and baked beans maker Heinz in a deal worth $US28 billion ($A27 billion).

The buyers heralded 144-year-old HJ Heinz Co's strong, global portfolio of prepared food brands, which Buffett called "great tasting" products.

Heinz baked beans are now in the hands of the Oracle of Omaha.

Heinz baked beans are now in the hands of the Oracle of Omaha. Photo: Domino Postiglione

Heinz said it was the largest ever takeover in the food industry.

The two buyers will pay Heinz shareholders $US72.50 per share in cash - a 20 per cent premium on Heinz's Wednesday closing price.

Counting debt assumed by the buyers, the deal valued Heinz at about $US28 billion, they said.

Heinz deal ... Warren Buffett.

Heinz deal ... Warren Buffett. Photo: AFP

Heinz shares soared to $US72.51 in opening trade on the New York Stock Exchange after the announcement, adding to a 17 per cent gain over the past 52 weeks.

"Heinz has strong, sustainable growth potential based on high quality standards, continuous innovation, excellent management and great tasting products," Mr Buffett, the chairman of Berkshire Hathaway, said.

"Their global success is a testament to the power of investing behind strong brand equities and the strength of their management team and processes."

US food giant

With $US11.6 billion in global sales last year, Heinz is one of the largest US food companies.

It owns top prepared food brands such as Golden Circle in Australia, ABC sauces in Asia, Quero sauces in Latin America, OreIda frozen potatoes sold globally, Honig in the Netherlands, Plasmon baby food in Italy, and Classico pasta sauces and Smart Ones low-calorie frozen foods in North America.

But its main products are the iconic Heinz ketchup, sold globally through supermarkets and fast-food vendors, and one of its earliest favourites in the United States, canned baked beans.

"The Heinz brand is one of the most respected brands in the global food industry and this historic transaction provides tremendous value to Heinz shareholders," said Heinz chairman and chief executive William Johnson.

"With Heinz stock recently at an all-time high and 30 consecutive quarters of organic topline growth, Heinz is being acquired from a position of strength.

"As a private enterprise, Heinz will have an opportunity to drive further growth and advance our commitment to providing consumers across the globe with great tasting, nutritious and wholesome products."

The deal is a blockbuster for Berkshire Hathaway.

Mr Buffett's firm has been searching for lucrative ways over the past two years to invest its more than $US40 billion cash hoard in an environment of low interest rates and intense competition from other cash-rich investment funds for merger and acquisition opportunities.

Berkshire and 3G pledged to keep Heinz as it is, with its base in Pittsburgh, Pennsylvania.

The deal is subject to approval by Heinz shareholders, and is expected to be completed in the third quarter of this year.

Payday for Kerry's wife

Teresa Heinz Kerry, the wife of Secretary of State John Kerry, should do well out of the takeover.

The $23 billion sale of Heinz valued the stock at $72.50 a share, 20 per cent higher than yesterday’s closing price of $60.48.

Through three family trusts, Ms Heinz Kerry, the widow of Pennsylvania Republican Senator John Heinz, owned more than $3 million in Heinz stock in 2011, according to a personal financial disclosure report filed in August 2012 by her husband, then a US senator from Massachusetts. Kerry didn’t report any holdings in the company.

Lawmakers provide estimates on the amount of their holdings and their spouses’ investments in broad ranges.

Mr Kerry’s filings indicate that his wife’s trusts held three stakes in Heinz, each valued at more than $1 million.



  • If Buffet is buying Heinz you can be assured it has a great future as Buffet rarely makes a mistake in his investments.

    Date and time
    February 15, 2013, 9:47AM
    • In 10 years time people will still be eating Baked beans and tomato sauce......

      Date and time
      February 15, 2013, 10:40AM
    • I still like baked beans.

      Date and time
      February 15, 2013, 10:45AM
    • HMMMMM!!! Baked beans Yum
      other than that I hope the quality does'nt suffer
      as a result

      Richard Appleseed
      Date and time
      February 15, 2013, 12:02PM
  • The old bloke is taking a punt on world food prices I reckon and getting in early. No hot air here (yet)

    Date and time
    February 15, 2013, 10:13AM
    • Will it now be Heinz-Buffet Meals?

      Date and time
      February 15, 2013, 10:25AM
      • Bring back green tomato sauce Warren.

        And add a dash of habanero to it to make my tongue zing- Tired of boring sauce packets for pies.

        Date and time
        February 15, 2013, 10:25AM
        • Pretty much typifies Buffett's 'get rich slow' philosophy. Forget the fads and flim-flam and focus on sound companies that provide good products and services that people will still be needing whatever gadgets and gizmos come and go.

          And one thing is for sure: folks will always need to eat.

          Date and time
          February 15, 2013, 10:39AM
          • this is the start of the trend.
            the US (and global economies) are awash with cash, they have been printing it non stop, call it what you like QE1, QE2 etc:....even the 'sage' is making the mistake of paying a 'large premium' for an asset, in a struggling economic environment .....This can only lead to hyper-inflation down the track!...there will be more of the same over the coming year as funds struggle to realise above inflation (which will in turn rise!) returns.......this will spiral out of control.

            Date and time
            February 15, 2013, 10:54AM
            • OMG!!!

              Tom J
              Date and time
              February 15, 2013, 11:24AM

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