what it takes to get a proxy through the SEC (U.S. Securities and Exchange Commission). The friendly merger of H.J. Heinz and Kraft Foods Group Inc. was done in a short period. In just 10 weeks, starting in mid-January, the two companies agreed to the $46 billion deal, managed by private-equity firm 3G Capital and Warren Buffett’s Berkshire Hathaway Inc. In early January, 3G called its advisers, including bankers from Lazard Ltd. and lawyers from Cravath, Swaine & Moore and Kirkland & Ellis and informed them about its intention to merge with Kraft Foods. Alex Behring da Costa, a 3G co-founder and Heinz chairman, flew to Northfield, Chicago, and Kraft’s home to meet Cahill for the first time. During the meeting Cahill acknowledged the logic of combining the two companies, and the two agreed to meet again in New York. Over the following weeks, Cahill and senior Kraft executives made frequent trips to 3G’s office to negotiate. Cahill and his team pressed for a big premium to justify shareholders losing control of the company while Behring da Costa countered that the need for a substantial premium was lessened because Kraft shareholders would co-own a company controlled by two of the world’s most successful investors, 3G and Buffett’s Berkshire Hathaway. Both companies' boards have unanimously approved the deal, which is targeted to close in the second half of the year. The merger was announced on March 25, 2015 and received regulatory approvals in the U.S. and Canada but It still needed approval from Kraft shareholders. On July 1, 2015, Kraft Foods Group, Inc. shareholders voted to approve the previously announced merger agreement providing for the creation of the Kraft Heinz Company. There are many factors that helped speed the negotiations such as: - Each side was represented by a single investment-banking firm, Centerview Partners LLC served as adviser for Kraft, and Lazard advised Heinz. - The pressure on Kraft Chief Executive Officer John Cahill to get a deal done, 3G told Cahill that Kraft was the best fit, at the same time it made clear it would move on to another food company if the two couldn’t reach an agreement. - Lack of antitrust concerns, often a sticking point in mergers. “Their brands don’t compete, and in mergers of consumer packaged-goods companies, products can be sold easily if regulators are 12 Page 10
REFERENCESREFERENCES concerned about the loss of competition between any of them,” said Fiona Scott Morton, a former chief economist with the Justice Department’s antitrust division and now at the Yale School of Management. ANTI TRUST All of the merger s always face the antitrust issu es, antitrust is a law that protects pure competition in sight of unfair business activities that constrains competition or have a control over process prices. The same law binds Kraft Heinz merger. In the SEC filings, the companies should reveal the names of their rivals/competitors. Howeve r, Heinz and Kraft in their SEC filings does not address or specify their rivals/competitors.
- Spring '13
- H. J. Heinz Company, H.J. Heinz Company, 3G Capital