H.J. Heinz and Kraft Foods are merging into what will become the fifth largest food and beverage company in the world, according to sources. Under the new company name Kraft Heinz Co., the business will be co-headquartered in Chicago, Illinois and Pittsburgh, Pennsylvania.

Shareholders of Kraft will receive a cash dividend of $16.50 per share and stock representing 49 percent. Berkshire Hathaway and 3G Capital plans to invest $10 billion dollars in the new company for the special dividend. Shareholders of Heinz stock will hold 51 percent ownership. The new company’s revenue will be approximately $28 billion dollars.

Recent changes in American consumers’ tastes for food are believed to be one of the reasons for the merge, as food makers have recently struggled with sales of processed and prepackaged foods. The merge will enable Kraft brands to venture into international markets. The merge includes products such as Heinz, Kraft, Oscar Mayer and Philadelphia — known for its popular cream cheese.

According to the Kraft Chairman and CEO, the merger will allow the companies to grow while taking advantage of the iconic brands that each company has created. In particular, markets outside of the U.S. will be targeted.

Such mergers with businesses require significant planning and negotiations as the terms are established and agreed upon. It is wise for any business considering a merge to speak with law professionals to make certain all aspects are covered and properly addressed. This is one area of business an owner does not want to tackle alone or without proper knowledge or guidance.

Source: Texas Public Radio, “Heinz, Kraft Announce Merger,” Krishnadev Calamur, March 25, 2015