Heinz and Kraft Foods merge and create the 5th food group in the world

An agreement for merging has been signed from the heads of HJ Heinz and Kraft Foods Group companies, in order to create the Kraft Heinz, the fifth largest food and drinks group in the world.

Kraft shareholders will receive shares in the new company and a special cash dividend amount of $ 16.50 per share, while existing shareholders of Heinz will hold 51% of Kraft Heinz. The agreement was unanimously approved by the administrative councils of both companies.

The new company will have a turnover of about $ 28 billion, eight brands with a value of over 1 billion dollars each and five value 500 million - 1 billion dollars each.

The joint statement of the two food industries came on 25 March. According to officials, the merger of the two companies will lead to cost savings of 1.5 billion dollars by the end of 2017.

"Our goal is to have top innovation," said Bernardo Hees, CEO of Heinz, who will become CEO in the new Kraft Heinz. Alex Behring, president of Heinz and CEO at 3G Capital, will be the president of the new company.

There exists some doubt for the results of the agreement and how good for shareholders is. «Kraft and HJ Heinz have been involved in a complicated merger" said Scott Rothbort, professor at the University of Seton Hall, to USA Today."It is rather an overvalued agreement, resulting in financial engineering from the perspective of 3G and the shareholder-investor Warren Buffett", he added.

The deal, subject to approval by the shareholders of Kraft and regulatory approvals, is likely to be completed during the second half of 2015.