3G Accelerates Management Shake-Up Ahead of Kraft-Heinz Merger -- Update

By Annie Gasparro And Maria Armental 

H.J. Heinz Co.'s private-equity owner accelerated its shake-up of Kraft Foods Group Inc.'s management ranks, ahead of a shareholder vote on approving their combination.

Kraft and Heinz, which is controlled by Brazilian investment firm 3G Capital Partners LP, on Monday announced several appointments to key leadership positions. The changes include the departure of nine more Kraft executives, following those of the chief financial officer, chief marketing officer and research-and-development head announced in February, a month before the merger plan was revealed.

Executives appointed by 3G at Heinz since it took over the ketchup company two years ago will hold about half of the top 20 positions at the combined Kraft-Heinz, based on Monday's announcement. Heinz employees, both legacy ones and newer people chosen by 3G, accounted for eight of the top 10 positions named Monday.

The announcement came ahead of a vote on Wednesday by Kraft shareholders on whether to approve the proposed merger, which is widely expected to pass. The deal also is subject to regulatory approval.

The Kraft-Heinz merger, which was announced in March, will bring together iconic brands like Oscar Mayer deli meat and Ore-Ida Bagel Bites in a deal investors have pegged at around $49 billion.

Heinz Chief Financial Officer Paulo Basilio will be CFO of the combined company, pushing out Kraft CFO James Kehoe, who was appointed earlier this year. Eduardo Pelleissone, another legacy 3G pick, will be senior vice president of global operations, heading up the supply chain and procurement. Sergio Nahuz, who was named CFO of Heinz Europe when 3G stepped in, will replace Kraft's Tom Corley as head of U.S. sales.

Heinz executives, some of whom were with the ketchup maker before it was taken over by 3G and Warren Buffett in June 2013, will lead four international divisions, human resources and corporate and government affairs.

From Kraft, Chief Operating Officer George Zoghbi will lead the combined company's U.S. commercial business, which will have more than $19 billion in sales. Kraft executive Jim Savina was promoted to general counsel.

3G cut many jobs at Heinz after it took over and shuffled management positions--sometimes repeatedly. Analysts and other industry executives expect more changes to the staff at Kraft, including personnel cuts, once the merger is complete.

Other Kraft leaders whose departures were announced Monday include Diane Johnson May, head of human resources, Robert Gorski, executive vice president of integrated supply chain, and Kim Rucker, head of corporate and legal affairs. The company said it would name a new leader for Canada in August, replacing Kraft's Chris Kempczinski.

Write to Annie Gasparro at [e-mail] and Maria Armental at [e-mail]

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