(WXXI News & AP) A mega-merger in the food business has a local connection.
H.J. Heinz is buying Kraft Foods, creating one of the largest food and beverage companies in the world with annual revenue of about $28 billion.
The deal to bring together the two companies was engineered by Warren Buffett's Berkshire Hathaway and Brazilian investment firm 3G Capital. The two will invest another $10 billion in the new company.
Kraft operates a plant in Avon, Livingston County. It employs around 400 people involved in the production of Cool Whip and the Lunchables snacks. In fact it is the only Kraft plant that makes Cool Whip.
The statement about the deal does talk about the potential for synergies and cost reductions. But when asked about that by WXXI News, a spokesperson said it’s too early to speculate on any details. She says it’s business as usual until the transaction closes. That’s expected to happen later in the year.
During a conference call Wednesday, Kraft Chairman & CEO John Cahill did portray this deal as a good one for both companies.
“This transaction enables us to move and grow faster than we could on our own, allowing us to fulfill our potential as an industry leader , navigate a fast changing marketplace, and emerge as a global powerhouse,” Cahill told reporters.
The merger comes as well-established food producers struggle to keep up with shifting appetites. Consumers are seeking more unprocessed foods, and have migrated away from one-time staples of the American diet.
