NEW YORK: Heinz and Kraft on Wednesday said they would merge to create North America’s third-largest food and beverage company, in a deal backed by Brazil’s 3G Capital and investment guru Warren Buffett.

The combination of HJ Heinz Company and Kraft Foods Group will bring together a wide portfolio of well-known brands and benefit from Heinz’s international platform, the companies said.

Buffet’s Berkshire Hathaway and 3G, Heinz’s owners, will have a 51 percent stake in the combined firm, to be called The Kraft Heinz Company, with a 49 percent stake to be held by Kraft’s existing shareholders. The proposed company would have revenues of about $28 billion a year.

Berkshire and 3G will invest an additional $10 billion to pay for a special cash dividend of $16.50 per share for Kraft shareholders.

The dividend represents a 27 percent premium to Kraft’s closing price Tuesday. The deal has been unanimously approved by the companies’ boards of directors.

“This is my kind of transaction, uniting two world-class organizations and delivering shareholder value,” Buffett said in a statement. The chairman and chief executive of Berkshire Hathaway is considered one of the world’s savviest investors.

The new company will have eight billion-dollar brands and five others worth more than $500 million in sales. Heinz’s brands include Heinz Ketchup, Ora-Ida potato products and Weight Watchers packaged foods. Kraft’s portfolio includes Kraft Macaroni & Cheese, Maxwell House coffee and Oscar Mayer hot dogs. “By bringing together these two iconic companies through this transaction, we are creating a strong platform for both US and international growth,” said Alex Behring, chairman of Heinz and the managing partner at 3G Capital.—AFP