Warren Buffett’s Berkshire Hathaway has bought H.J. Heinz Co for $23.2 billion in a deal with private equity firm 3G Capital, according to a report from Reuters.
Heinz valued the transaction, which it called the largest in its industry’s history, at $28 billion including debt assumption.
Berkshire and 3G will pay $72.50 per share, a 19 percent premium to the stock’s previous all-time high.
Buffett (pictured) warned he would not not raise his bid for Heinz when shares actually rose slightly above the offer price in early trading. Heinz shares went on to soar 20 per cent to $72.59 on the New York Stock Exchange.
Heinz said the transaction would be financed with cash from Berkshire and 3G, debt rollover and debt financing from J.P. Morgan and Wells Fargo.
Buffett told CNBC that Berkshire is putting up about $12bn to $13bn cash for the deal, leaving it ample room for another major transaction. He also added that Berkshire and 3G would be equal equity partners.
The deal marks an unusual move from Berkshire Hathaway into private equity, with Buffett’s past purchases having always been outright his own.
3G is a little-known private equity firm originally from Brazil, with a major stake in food chain Burger King.
Berkshire Hathaway already has a variety of food assets, including the Dairy Queen ice cream chain, chocolatier See’s Candies and food distributor McLane.