Berkshire Hathaway and Buffett Whale Hunt: Acquiring Heinz for $28 Billion

Warren Buffett is out on another whale hunt acquisition today. Berkshire Hathaway Inc. (NYSE: BRK-A) and 3G Capital are acquiring food giant H.J. Heinz Co. (NYSE: HNZ). The terms are listed as being $72.50 per share, for a value of $28 billion if you include the debt. Heinz had a market cap of $19.4 billion, based on a $60.48 close on Wednesday.

Heinz is of course known best for ketchup, but there is much more to the company than meets the eye. Other brands are Classico, OreIda, Smart Ones, Fridays and more. Heinz also is a leader in infant nutrition, frozen potatoes, frozen entrées and sauces. Its products are sold in more than 200 countries across North America, Europe, Asia-Pacific and other regions.

The transaction will be financed through a combination of cash provided by Berkshire Hathaway and affiliates of 3G Capital, rollover of existing debt, as well as debt financing that has been committed by J.P. Morgan and Wells Fargo.

Heinz shares have traded in a 52-week trading range of $51.51 to $61.18, and this buyout represents an all-time high. Heinz's common stock dividend yield was listed as 3.4% as of yesterday's closing bell price.

One firm had an unlucky timing on a downgrade. UBS downgraded Heinz to Neutral from Buy on Wednesday.

Filed under: 24/7 Wall St. Wire, Buffett, Food, Mergers & Acquisitions, Mergers and Buy Outs Tagged: BRK-A, BRK-B, HNZ