Buffett buying Heinz for $23.3B

NEW YORK — Billionaire Warren Buffett is dipping
into the ketchup business as part of a $23.3 billion
deal to buy H.J. Heinz Co., uniting a legend of
American investing with a mainstay of grocery store
shelves.
It’s the largest deal ever in the food industry and is
intended to help Heinz accelerate its transformation
into a global business. The company, based in
Pittsburgh, also makes Classico pasta sauces, Ore-
Ida potatoes and Smart Ones frozen meals.

Buffett’s Berkshire Hathaway and its partner on
the deal — 3G Capital, the investment firm that
bought Burger King in 2010 — say Heinz will
remain headquartered in Pittsburgh.
Heinz CEO William Johnson said at a news
conference that taking the company private would
give Heinz the flexibility to make decisions more
quickly, without the burden of having to report
quarterly earnings.
Last year, Heinz had sales of $11.6 billion, with
ketchup and sauces accounting for just less than
half of that. Given the saturated North American
market, it has increasingly been looking overseas
for growth. In 2010, for example, the company
bought Foodstar, which makes Master brand soy
sauce and fermented bean curd in China. Heinz
expects emerging markets to account for a quarter
of the company’s sales this year.
At a news conference following the announcement,
Johnson said the deal got under way eight weeks
ago when managing partners from 3G Capital
visited him for lunch. The men were familiar with
each other
because Heinz is a supplier for Burger King.
Buffett said on CNBC Thursday morning that 3G’s
billionaire co-founder Jorge Lemann approached him
about the Heinz deal on a plane they were on in
early December.
Buffett did not immediately respond to a message
from The Associated Press on Thursday. But he has
recently said that he’s been hunting for elephant-
sized deals.
Locally, Berkshire Hathaway owns Milford-based
CTB Inc., which designs and produces equipment for
the grain, poultry, hog and egg industries, and RV
manufacturer Forest River of Elkhart.
Berkshire’s biggest acquisition ever was its $26.3
billion purchase of BNSF railroad in 2010. Before
that, it was the $16 billion stock purchase of
reinsurance giant General Re in 1998

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