Wednesday, April 23rd2.5°C
20923

Warren Buffet loves Heinz ketchup

Heinz Co. is being purchased by an investment group including billionaire investor Warren Buffett in a deal valued at $23.3 billion.

The ketchup company says it's the largest deal ever in the food industry. Heinz, based in Pittsburgh, also makes Classico spaghetti sauces, Ore-Ida potatoes and Smart Ones frozen meals.

"It's our kind of company," Buffett said in an interview on CNBC, noting its signature ketchup has been around for more than a century. "I've sampled it many times."

The company was founded by Henry John Heinz and his neighbour L. Clarence Noble in 1869. The pair's first product was grated horseradish, bottled in a clear glass to showcase its purity. The first ketchup was introduced in 1876; the company says it was the country's first commercial grade ketchup.

Last year, Heinz says it had sales of $11.6 billion, with ketchup and sauces accounting for just under half of that. Given the saturated North American market, the company has increasingly looked overseas for growth. In 2013, emerging markets are expected to account for a quarter of the company's sales.

Berkshire Hathaway and 3G Capital, the investment firm which bought Burger King in 2010, say Heinz will remain headquartered in Pittsburgh. Heinz CEO William Johnson said in a statement that the company "will have an opportunity to drive further growth" as a private enterprise.

Representatives for Heinz and the investment group weren't able to immediately provide any further details on the deal, including whether there would be any management changes or layoffs.

Heinz shareholders will receive $72.50 in cash for each share of common stock they own. The transaction value includes the assumption of Heinz's debt. Based on Heinz's number of shares outstanding, the deal is worth $23.3 billion excluding debt.

The per-share price for the deal represents a 20 per cent premium to Heinz's closing price of $60.48 on Wednesday. Heinz said the deal was unanimously approved by its board. Buffett said on CNBC that Berkshire is putting $12 billion to $13 billion into the deal. But he noted that Berkshire will still have room to make more acquisitions because its businesses continually replenish its cash supply.

"Anytime we see a deal is attractive and it's our kind of business and we've got the money, I'm ready to go," Buffett said.

The deal is expected to close in the third quarter.

Shares of Heinz were up nearly 20 per cent at $72.45.

The Canadian Press


Read more Business News

21672


Recent Trending




Today's Market
S&P TSX14555.97+62.29
S&P CDNX1004.887.67
DJIA16514.3765.12
Nasdaq4161.458+39.912
S&P 5001879.55+7.66
CDN Dollar0.9062-0.0007
Gold1284.60+4.00
Oil102.15-2.22
Lumber336.70+1.40
Natural Gas4.735-0.004

 
Okanagan Companies
Pacific Safety0.105-0.01
Knighthawk0.01-0.005
QHR Technologies Inc1.21-0.06
Cantex0.05+0.005
Anavex Life Sciences0.385-0.005
Metalex Ventures0.080.00
Russel Metals31.17+0.47
Copper Mountain Mining2.380.00
Colorado Resources0.26+0.005
ReliaBrand Inc0.11+0.03
Sunrise Resources Ltd0.025-0.005
Mission Ready Services0.25+0.02

 





FEATURED Property
1877654#46 3295 Broadview Road
3 bedrooms 3 baths
$339,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Learning to flirt with the edge

With all of the adventure activities I have done and still do, I wonder sometimes if the edge still exists. The systematic approach to learning a new adventure or extreme activity combined with the r...


Time spent prospecting

How much time should you put into prospecting? The question is a bit of a puzzle. Ideally, there would be a reference book that lists, by industry, how much time you should invest in prospecting acti...


Valuation fears grip markets

The Big Picture Valuation fears grip markets Growing concerns about the level of stock market valuations sparked a risk-off trade in global markets this week. Investors are worried that many companies...

_



21368

21637


Member of BC Press Council


20728