Warren Buffett Partners With Brazilian, Invests In Ketchup

heinz

What do Warren Buffett and Sec. of State John Kerry have in common? Kerry’s wife!

No, it’s not what you might think. Warren Buffett has added another American icon to his portfolio. Buffet’s Berkshire Hathaway announced Thursday its plans to buy 144-year-old H.J. Heinz—to which Teresa Kerry’s late husband John Heinz was an heir—for $23 billion. The proposed acquisition follows a $24 billion buyout of Dell computers and several other smaller deals, leading analysts to speculate the reemergence of the pre-recession merger boom.

Berkshire is not alone in its most recent acquisition, however. Buffett is joined by Brazilian-backed investment firm 3G Capital Management, which owns a majority stake in Burger King. Berkshire and 3G have offered $72.50 a share—20 percent more than Heinz’ closing price on Wednesday.

This is my kind of deal and my kind of partner,” Buffett told CNBC on Thursday. “Heinz is our kind of company with fantastic brands.

Heinz certainly fits Buffet’s typical acquisition criteria. It has broad brand recognition with its ketchup, as well as Ore-Ida potatoes and Lea & Perrins Worcestershire sauce—which it also owns. And it has performed extremely well recently. In fact, Heinz stock has risen almost 17 percent in the past 12 months. Buffett actually told CNBC he had a file on Heinz dating back to 1980, but credited 3G with the deal. 3G backer Jorge Paulo Lemann approached Buffett with the idea of buying Heinz about two months ago, according to a person with direct knowledge on the matter. Together, the two approached Heinz’ chief executive William R. Johnson about buying the company.

We look forward to partnering with Berkshire Hathaway and 3G Capital, both greatly respected investors, in what will be an exciting new chapter in the history of Heinz,” Johnson said in a statement.

Heinz stock was up almost 20 percent in afternoon trading—good news for the Kerry family. According to Kerry’s most recent financial disclosures from his time in the senate, he holds Heinz shares exceeding $1 million, although the exact size of the position is unclear.

[Image via Flickr/Hannah & Noah]