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[NEW YORK] Heinz and Kraft will merge to become North America's third largest food and beverage company, the two US food giants said in a joint statement on Wednesday.
Heinz's current shareholders will have a 51 per cent stake in the new Kraft Heinz Company, with the rest to be held by Kraft's shareholders, the statement said.
Heinz's controlling shareholders, US billionaire Warren Buffet and 3G Capital of Brazil, will reinvest US$10 billion dollars in the new group.
This will make it possible to offer Kraft shareholders a special dividend of US$16.50 along with their 49 per cent stake in the new company, the statement said.
The makers of Heinz Ketchup and Oscar Meyer Weiners are banking on "significant synergy opportunities with a strong platform for organic growth in North America, as well as global expansion, by combining Kraft's brands with Heinz's international platform," it said.
The merged company expects to pull in revenues of about US$28 billion, it said, noting that it will boast eight brands that earn more than US$1.0 billion each and five in the US$500 million to US$1.0 billion range.