PITTSBURGH, PA - The H.J. Heinz Company announced that it is merging with the Kraft Food Group in a union valued at about $46 billion.
“This transaction creates the third largest food company in North America and the fifth largest food company in the world, with combined sales of $28 billion and 44,000 employees,” Klaus Hofmann, Senior Vice President of Global Procurement, said in a press release.
The new Kraft Heinz, Co. will be co-headquartered in both Pittsburgh and Chicago in respect of the hometowns of both companies, who have been household names for a number of years.
According to Hoffman, this decision was made with an understanding on both sides for the need to “preserve Heinz and Kraft’s heritage."
“This is a historic moment for Heinz, our employees and our millions of global consumers,” the release states. “Heinz and Kraft are two world-class businesses with storied pasts, and together, an even brighter future. We appreciate your ongoing support of Heinz as we move into the company’s next exciting chapter.”
Heinz shareholders will own 51 percent of the combined company with Kraft shareholders owning the remaining 49 percent, according to Reuters. The parameters of the deal requires the exchange of each Kraft share for one share in the combined Kraft Heinz Co., plus a special cash dividend of $16.50 per share to existing Kraft shareholders.