Kraft, H.J. Heinz Agree To Merge To Form The Kraft Heinz Company - Quick Facts

(RTTNews) - Kraft Foods Group, Inc. (KRFT) Wednesday announced a definitive merger agreement with H.J. Heinz Co. (HNZ) to create The Kraft Heinz Company, forming the third largest food and beverage company in North America.

Under the terms of the agreement, which has been unanimously approved by the Boards of Directors of both companies, Kraft shareholders will own a 49 percent stake in the combined company, and current Heinz shareholders will own 51 percent on a fully diluted basis.

Kraft shareholders will receive stock in the combined company and a special cash dividend of $16.50 per share.

The aggregate special dividend payment of about $10 billion is being fully funded by an equity contribution by Berkshire Hathaway and 3G Capital.

The deal is expected to close in the second half of 2015. The proposed merger creates substantial value for Kraft shareholders, Kraft said. The special cash dividend payment represents 27 percent of Kraft's closing price as of March 24.

Also, by continuing to own shares of the new combined company, Kraft shareholders will have the opportunity to participate in the new company's long-term value creation potential.

When the transaction closes, Alex Behring, Chairman of Heinz and the Managing Partner at 3G Capital, will become the Chairman of The Kraft Heinz Co.

John Cahill, Kraft Chairman and Chief Executive Officer, will become Vice Chairman and chair of a newly formed operations and strategy committee of the Board of Directors.

Bernardo Hees, Chief Executive Officer of Heinz, will be appointed Chief Executive Officer of The Kraft Heinz Co.

The Board of Directors of the combined company will consist of five members appointed by the current Kraft Board, as well as the current Heinz Board, including three members each from Berkshire Hathaway and 3G Capital.

The Kraft Heinz Co. will be co-headquartered in Pittsburgh and the Chicago area.