PITTSBURGH (KDKA/AP) – H.J. Heinz Co. says it agreed to be acquired by Warren Buffett’s Berkshire Hathaway and 3G Capital in a deal valued at $23.3 billion.
It’s already being called the largest deal in the food industry.
The deal takes Heinz from a public company back to a private and guarantees that the headquarters remain in Pittsburgh.
According to Heinz CEO, William Johnson, and Alex Behring, managing partner of 3G Capital, it’s too early to tell how jobs might be impacted.
However, they were optimistic that the move could mean more local jobs as the company strengthens its position globally.
“I don’t think from a Pittsburgh community standpoint there’s going to be anything you’ll notice different about the company. And I think the employees are both enthusiastic and frankly there’s a little angst about what this means for them, but I can tell you the response we got from the employees together was terrific,” Johnson said.
Shareholders will receive $72.50 per share in cash. The stock closed at $60 per share on Wednesday.
Allegheny County Executive Rich Fitzgerald said there are some concerns, but remains optimistic that this could generate more jobs.
“It can be unsettling,” said Fitzgerald. “If you remember a number of years ago when Mellon Bank was bought up by BNY and they became BNY Mellon, I think a lot of us were concerned that those jobs were going to shift to NY where the parent company is. We’ve seen just the opposite. We’ve added thousands of jobs since then because Pittsburgh is a great place to do business. Pittsburgh is more economical, it has some of the infrastructure needed. We partner with our companies.
“Heinz has been a great, great Pittsburgh institution, obviously started here over a century ago. Berkshire Hathway is a great company. Warren Buffet, I don’t think he’s interested in moving it. I think it’s more of an investment. They see value in what Heinz is able to do. So we’ll continue to work with Heinz and partner with them. We want them to grow jobs here,” he added. “I think they’re going to continue. But anytime these merger and acquisitions occur, kind of above our pay grade here in Western Pa., These big Wall Street megadeals, they can be concerning. But I think we’re poised and positioned here in Western Pa. to be able to offer them the things they need to continue to thrive and grow here.”
The deal value includes the assumption of Heinz’s debt. Based on Heinz’s number of shares outstanding, the deal is worth $23.3 billion excluding debt.
It is unclear what effect this will have on jobs in Pittsburgh. However, Heinz will remain headquartered in Pittsburgh.
“It’s in the agreement. It’s part of the contract,” said Johnson. “I told them Pittsburgh is not negotiable. My home is here, our employees live here. Pittsburgh has been headquarters to Heinz since 1869.”
According to their company website, Heinz employs about 32,000 people around the globe.
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