Heinz chief Bill Johnson today (14 February) insisted the US food giant has the potential to get “bigger and better” under the ownership of investment funds Berkshire Hathaway and 3G Capital.
Speaking to reporters after Heinz announced it had accepted a US$28bn takeover bid from Berkshire and 3G, Johnson outlined how the ketchup maker could benefit from private ownership.
Johnson, who has been Heinz CEO for 15 years, said the company could become “even more focused, more competitive, more nimble and benefit from faster decision-making”.
The deal for Heinz, which the company said would be the largest ever in the food sector, stunned the industry.
Berkshire, which is headed by famed US investor Warren Buffett, and 3G, which has had investments in brewing giant Anheuser-Busch InBev and fast food chain Burger King, will each own 50% of Heinz. After 3G co-founder Jorge Paulo Lemann approached Buffett in December, the two sides drew up plans that resulted in a bid worth $72.50 a share. Heinz said the offer, which has been accepted by its board, was a 20% premium on the company’s share price when trading in New York closed yesterday.
Alongside Heinz chairman, president and CEO Johnson, 3G managing partner Alex Behring addressed the media at the company’s HQ in Pittsburgh. Asked about the prospect of cost cuts at Heinz, Behring insisted it was too early to comment.
“We’ve been involved in a variety of deals in the past. Some of them had a lot of opportunity for cost optimisation and efficiency and some didn’t. It’s very early to say. We have several months ahead of us to get to understand the team and the people,” he said. “If you compare and contrast with some of the businesses we got involved with in the past this is a company that’s doing extremely well as it is and has been doing extremely well for a number of years prior to our involvement.”
Johnson, who described today as a “truly historic moment” for Heinz, said the company was being taken over from a strong position. “What makes this different from most situations is this company is being acquired from a position of strength. Our stock has been at an all-time high, we’ve had 30 consecutive quarters of organic top-line growth. This company’s never been stronger. That doesn’t mean there won’t be changes going forward but I think, ultimately, this will be a platform for doing bigger and better things in this industry.
“It is interesting, as an aside, that if you look at the market today a lot of our peer companies are trading up on the news about us. I will leave implications on that to your own judgement. Our goal here is to make this a better and even more global company. That is a goal we share with 3G and Mr Buffett.”