In this morning’s press release, H.J. Heinz shareholders approved the acquisition of Heinz by 3G Capital and Bershire Hathaway. It is expected to be an official private company by the third quarter of this year. On Valentine’s Day, Heinz reported plans to become a private company, and today the merger was approved and adopted by an estimated 95 percent of the shareholders. The shareholders will receive $72.50 for each share of stock when the transaction closes. The transaction is valued at $28 billion.
Heinz is an integrated part of the Pittsburgh community so although restructuring may occur it is expected that H.J. Heinz headquarters will not relocate from Pittsburgh. H.J. Heinz has operations throughout the Americas, Europe, Asia, Africa and Australia. “Heinz has received antitrust clearance in the United States, Brazil, India, South Korea, Japan, Israel, Mexico, South Africa and Ukraine. The Company is waiting for antitrust clearance in China, the European Union and Russia. Additionally, Heinz has filed for other regulatory approvals in New Zealand, Ireland and Russia.”
In Heinz’s forward looking statements, the major identified risks factors that could positively or negatively influence the merger agreement and/or expected timelines are unforeseeable events, government approvals, closing conditions, financing and personnel. The remaining details that could impact the merger are located in the annual report filed with SEC.
The FBI is investigating insider trading as the Securities Exchange Commission froze the assets of Swiss account that was used in the options trading to reap $1.7 million through the purchase of Heinz’s options the day prior to the announcement. That’s a three-day turnaround between the actual trading and the lawsuit, but thise typically take some time before an individual is charged.
“Three weeks ago, the SEC announced it had charged a vice president of finance at the Del Monte Foods Co. with insider trading for buying stock in advance of the San Francisco Company’s November 2010 announcement that it was going to be bought by an investor group. The company has an administrative office on Pittsburgh’s North Shore.”
There is a further connection between Heinz (NYSE: HNZ) and Del Monte. In the 2002 merger, Heinz shareholders owned 75% of Del Monte Corp while Del Monte Food Company shareholders owned 25 percent through a tax free spin off agreement. Heinz contributed products to SKF Foods Inc. which was directly used for the purpose of this agreement. SKF Foods Inc was subsidiary of Heinz that was used directly or indirectly over the years and changed its name to Del Monte Corp during this merger agreement. Del Monte Foods Company merged with Del Monte Corp. The impact on the stock prices were Del Monte’s rose while Heinz’s fell. Heinz does not own Del Monte Corp stock, and it is now considered Fresh Del Monte Produce (NYSE: FDP).