Famed US investor Warren Buffett today (14 February) labelled Heinz as his “kind of company” after his Berkshire Hathaway fund struck a deal to pay US$28bn for the ketchup giant.
Speaking to CNBC after Berkshire’s offer was announced – which, if accepted will be the largest-ever takeover in the food history – Buffett praised the US food group’s brands.
“It’s our kind of company. They’ve got a group of fantastic brands, led by ketchup. I’ve sampled it many, many times,” he said.
Berkshire has teamed up with private-equity firm 3G Capital to buy Heinz in a deal that has stunned the food industry and driven up shares in the food companies listed in the US in early trading in New York.
The Heinz board has agreed to the deal, worth $72.50 a share, which it said was a 20% premium to the company’s share price when the New York Stock Exchange closed yesterday.
Berkshire and 3G Capital will each own 50% of the business. Buffett revealed 3G co-founder Jorge Paulo Lemann had approached him over a potential deal for Heinz two months ago. “I’ve got a file on Heinz that goes back to 1980 but he is the one that got me going on this in December,” Buffett said.
3G Capital, which has had FMCG experience with investments in brewing giant Anheuser-Busch InBev and fast-food chain Burger King, will run Heinz, Buffett told CNBC. The investor he expected Heinz chairman, president and CEO Bill Johnson to stay with the baked beans manufacturer.
“I’d expect him [to] but the 3G people are in charge of things. It’s their baby from an operational stand-point. We’re their partner but they’ve done a fantastic job with Anheuser-Busch and Burger King. It’s a great partnership for us and any partnership where I don’t have to do the work is my kind of partnership,” he said.
Shares in Heinz jumped on news of the $28bn deal. The Heinz stock was up 19.91% at $72.52 at 10:09 ET.
Buffett insisted he would not lift his bid for the business. “They got the last penny out of me. We’ve bought a number of companies where they have traded temporarily higher. That’s not unusual,” he said.