Pending approval from regulators, Heinz and Kraft Foods will merge into the Kraft Heinz Co. a joint press release from the two companies announced Wednesday.
The combined company will be the third-largest producer of food and drink in North America, with annual revenues of about $28 billion. Warren Buffett’s Berkshire Hathaway and Brazilian company 3G capital are forking over $10 billion to help the merger happen.
Why are these two food giants merging? According to the release, “synergies.”
“The complementary nature of the two brand portfolios presents substantial opportunity for synergies, which will result in increased investments in marketing and innovation,” the release states.
Further down, it continues with more jargon:
The significant synergy potential includes an estimated $1.5 billion in annual cost savings implemented by the end of 2017. Synergies will come from the increased scale of the new organization, the sharing of best practices and cost reductions.