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H.J. Heinz M&A Board meeting On the Proposed Acquisition

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Debiprasad Dash
Debiprasad Dash

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 Debiprasad Dash (16202161) Anjana Tanaya Rautaray (16202149) Payal Choudury (16202178) Sankit Suman Mohanty (16202190) Dheeraj Kumar Khaitan (16202291) Shivang Tiwari (16202295)
Issues in H.J. Heinz Company Competition ? Major competitors are ¨C 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
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
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
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
? 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
Benefits for Berkshire Hathaway & 3G Capital Complementary goods Cash cow Outstanding brand loyalty Infiltration of emerging market
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
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
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.

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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 ¨C 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
  • 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.