Shares of Kraft Foods Group Inc. were up as much 37% in premarket trade on Wednesday, after the food-and-beverage company announced a merger with H.J. Heinz Co. The combined entity will be known as Kraft Heinz Co.-- the third-largest food-and-beverage company in North America. Under terms of the deal, unanimously agreed by both boards of directors, Kraft shareholders will own a 49% stake in the company, and get a special cash dividend of $16.50 per share. Current Heinz shareholders will own a 51% stake. The aggregate special dividend payment of around $10 billion will be funded by an equity contribution from Berkshire Hathaway Inc. and 3G Capital, which owns Heinz. The new food company's shares are expected to trade publicly, according to a statement announcing the deal.
Copyright © 2015 MarketWatch, Inc.
Continue Reading Below