Warren Buffett and 3G Jointly Purchase Heinz

By CnAgri2013-03-13 10:53:19 Print Heinz, the tomato ketchup producer announced it had reached an agreement with Berkshire Hathaway which belongs to Buffett and 3G for acquisition. The latter two would spend 28 billion US dollars to purchase Heinz and it shall be the largest acquisition of the food industry in history.
 
The transaction waits to be approved from shareholders of Heinz and relevant authorities. The transaction is foreseen to be done in Q3 2013, and then 3G shall manage Heinz. Buffett informed Berkshire Hathaway would contribute 12-13 billion US dollars for the transaction.
 
It is analyzed this fully reflects the way of investment of Buffett who is fond of companies facing public consumption, with a long history and huge scale. Not only this, Buffet prefers companies that have long-term stable profit generation ability. Before this, Buffet bought Kraft and Coca Cola.
 
Also, the industry is positive towards the acquisition time. On the one hand, the global economy is gradually stepping out of the crisis and recovering, so the acquisition cost is low. On the other hand, the target company has a big potential, the market of daily necessities always exists and Heinz has a high fame in the world and has a large share in the emerging markets.
 
The net profit of Heinz in 2012 financial year was 939 million US dollars and net profit ratio 8.06%. Its sales revenue in the US accounted for 33% in the world total, whereas China, Brazil and India aggregated 67%.

From “China Fruit &Vegetable Market Monthly Report”