Deal for Heinz Would Rank as Largest Food-Focused Company Takeover

   By Drew FitzGerald 
 

A $28 billion offer for H.J. Heinz Co. (HNZ), including debt, would rank as the largest-ever takeover of a pure-food producer, according to research firm Dealogic.

Warren Buffett's Berkshire Hathaway Inc. (BRKA, BRKB) on Thursday partnered with private-equity firm 3G Capital to mount the deal, worth about $23 billion excluding acquired debt, in one of the largest deals in any industry since the 2008 financial crisis.

The deal for the Pittsburgh food producer rivals the $31.1 billion buyout of RJR Nabisco by Kohlberg, Kravis, Roberts & Co. in 1988, though that agreement included tobacco interests.

A bigger deal closed two decades later through InBev SA's nearly $60 billion acquisition of Anheuser-Busch Cos.--creating global alcohol giant Anheuser-Busch InBev NV (ABI.BT, BUD)--though that combination focused on Anheuser's beverage brands, namely the American brewer's Budweiser beer.

Vivendi SA (VIVEF, VIVHY, VIV.FR) also booked a bigger deal with its 2000 acquisition of beverage conglomerate Seagram Co. for $31.2 billion, according to Dealogic. The research firm's rankings accounted for debt acquired through the transactions.

In food, consumer-brand conglomerate Unilever NV (UN, UNA.AE) held the previous record for biggest takeover with its 2000 acquisition of Bestfoods for $23.2 billion. That deal brought brands such as Lipton tea, Knorr Soups and Lever soaps under the Unilever umbrella.

Dealogic's figures included debt acquired through the takeovers.

Kraft Foods has changed hands through bigger deals in recent years, though the transactions involved distributions to shareholders rather than an outright acquisition. Altria Group Inc. (MO) first spun off Kraft assets worth $56.2 billion to shareholders in 2007.

Kraft Foods split in two last year. Kraft's predecessor became Mondelez International Inc. (MDLZ), worth $61.6 billion at the time, while its grocery-food business, which kept the name Kraft Foods Group (KRFT), was worth $36.1 billion, according to analysis by Thomson Reuters. Thomson's figures also included the value of acquired debt.

-Erik Holm contributed to this report.

Write to Drew FitzGerald at [e-mail]

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