Heinz and Kraft boards back deal to create £18bn turnover food giant

The boards of Heinz and Kraft have agreed a merger deal.

The boards of Heinz and Kraft have agreed a merger deal. - Credit: Jason Alden/newscast

Heinz is set to buy rival Kraft in a deal that will gather some of the UK’s best-known grocery brands within one of the biggest food firms in the world.

The new firm, to be called the Kraft Heinz Company, will have annual revenue of in excess of 28billion US dollars (£18bn).

The deal has been engineered by Heinz’s owner, the Brazilian investment firm 3G Capital, and billionaire investor Warren Buffett’s Berkshire Hathaway.

Both companies’ boards have unanimously approved the deal, which is targeted to close in the second half of the year. It still requires approval from Kraft shareholders.

Current Heinz shareholders will own 51% of the combined company, with Kraft shareholders owning a 49% stake.

Kraft’s high-profile brands include Philadelphia and Dairylea cheeses, Capri Sun fruit juice and Maxwell House coffee.

However, it is probably best known in the UK for its controversial takeover of chocolate-maker Cadbury in 2010 for £11.5bn.

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In 2012 it announced that Cadbury would become part of its spin-off business Mondelez, alongside other brands such as Trident gum and Oreo biscuits.

Heinz is best known for its baked beans and tomato ketchup, together with HP and Lea & Perrins sauces.

It still uses the “57 varities” logo despite having more than 5,700 products worldwide – a throwback to founder Henry J Heinz’s belief in 57 as a lucky number.