H.J. Heinz M&A Board meeting On the Proposed Acquisition
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H.J. Heinz Company and Kraft Foods Group Sign Definitive Merger Agreement to Form The Kraft Heinz Company
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H.J. Heinz M&A Board meeting On the Proposed Acquisition
- 1. H.J. Heinz M&A Board meeting On the Proposed Acquisition Debiprasad Dash (16202161) Anjana Tanaya Rautaray (16202149) Payal Choudury (16202178) Sankit Suman Mohanty (16202190) Dheeraj Kumar Khaitan (16202291) Shivang Tiwari (16202295)
- 2. Issues in H.J. Heinz Company Competition • Major competitors are – ConAgra Food companies, Nestle, Kraft Foods • These competitors proposed a major threat to Heinz market share Profit and Market Share • 60% of the company’s sales were generated from markets outside of the US. • Increase profits and sales in the US without increasing market share Product life cycle and Business Stage • Heinz’s PLC has plateaued and the company appears to be in the maturity stage of the business
- 3. Key Players Of the Event William Johnson Chairman ,CEO of Heinz Warren Buffett CEO of Berkshire hatchway. Paulo Lemann Founder & current owner of 3G CAPITAL
- 4. 17.9% 17.6% 17.4% 18.0% 16.3% 16.2% 15.6% 25.7% 26.9% 26.9% 27.1% 28.4% 29.4% 33.3% 32.4% 25.8% 26.7% 26.0% 22.7% 17.8% 13.1% 14.2% 11.9% 11.1% 9.0% 12.2% 11.2% 8.0% 9.8% 15.1% 17.9% 19.9% 20.4% 25.4% 30.3% 2012 2013 2014 2015 2016 2017 2018 Europe Asian/pacific North america U.S.food service Rest of world Market Segment
- 5. 2012 2013 2014 2015 2016 2017 2018 Revenue(if not acquired) $11,657.00 $12,141.00 $12,657.00 $13,112.00 $13,744.00 $14,446.00 Revenue(if acquired) $11,508.00 $12,497.69 $13,572.49 $14,739.72 $16,007.34 $17,383.97 $18,878.99 $- $2,000.00 $4,000.00 $6,000.00 $8,000.00 $10,000.00 $12,000.00 $14,000.00 $16,000.00 $18,000.00 $20,000.00 Revenue Growth
- 6. • Diversify Away Risk of European Sales Collapse - Currently the European market accounts for 29.5% of total sales. Protection against European sales collapse • Burger King (3G Capital; 13,000 locations in 79 countries) Dairy Queen (Berkshire Hathaway; 5,700 locations in 29 countries) Heinz had been aggressively expanding into the emerging markets through acquisitions Safety as subsidiary • The expertise of Buffett and Lemann will ensure continued successExpertise for continued success. Benefits for Heinz
- 7. Benefits for Berkshire Hathaway & 3G Capital Complementary goods Cash cow Outstanding brand loyalty Infiltration of emerging market
- 8. Burger King Holdings Inc. agreed to sell itself to investment firm 3G Capital for $3.26 billion, giving the No. 2 U.S. fast-food chain breathing room to fix its business and close the gap with leader McDonald’s Corp. At $24 per share, the offer represents a 46 percent premium to Burger King’s price before news of the negotiations The sale, worth about $4 billion including debt Burger King’s private equity investors took the company public just four years ago at an initial share price of $17 Burger King’s stock jumped 25 percent Benefits of BURGER KING after acquisition 1 2 3 5 4
- 9. BERKSHIRE HATHAWAY holding 35% of Dairy Queen After holding the company share of dairy queen increases 7.76% Benefits of DAIRY QUEEN after acquisition 1 2
- 10. The Acquisition Proposal to The Board • Investors offer 70.00 USD per share of outstanding common stock. • As per the Advising committee there is a negative trend towards Heinz. • Because Low international GDP Growth. • But as per the strategic plan of 3G capital and Berkshire Hathaway's and as per the financial projections the Board has offer 78.00 USD per share.