PITTSBURGH, March 25 (UPI) -- Kraft Food Group Inc. and H.J. Heinz Co. have agreed to a merger to form the world's fifth-largest food company and North America's third-largest.
The brands of Kraft, based in Northfield, Ill., include Jell-O, Maxwell House coffee and Planters peanuts. Heinz, of Pittsburgh, has its iconic ketchup, as well as Ore-Ida potato products and Lea & Perrins sauce. Together they will form Kraft Heinz Co., with revenue of about $28 million.
Kraft stock rose 32 percent on the New York Stock Exchange on Wednesday morning. The deal was facilitated by Heinz owners 3G Capital and Berkshire Hathaway, who provided $10 billion in cash for a special dividend of $16.50 per share to Kraft shareholders. Heinz shareholders will own 51 percent of the new company.
Warren Buffett, of Berkshire Hathaway, said the deal was negotiated over the past month.
The boards of both Kraft and Heinz have approved the merger, which still requires a vote by Kraft shareholders, as well as regulatory approval. The deal is expected to be completed in the second half of 2015.