Pittsburgh-based HJ Heinz buying Kraft and building a $28 billion food giant

NEW YORK (AP) — H.J. Heinz Co. is buying Kraft Foods, creating one of the largest food and beverage companies in the world with annual revenue of about $28 billion.

The Kraft Heinz Co. will own Kraft, Heinz, Oscar Mayer, Ore-Ida and large stable of other brands. Eight of those brands have annual sales of $1 billion or more and five others log sales between $500 million and $1 billion every year.

The deal to bring together the two companies, each more than a century old, was engineered by Warren Buffett’s Berkshire Hathaway and Brazilian investment firm 3G Capital. The two will invest another $10 billion in the new company.

The merger comes as well-established food producers struggle to keep up with shifting appetites. Consumers are seeking more unprocessed foods, and have migrated away from one-time staples of the American diet.

Buffett, however, said both companies have a strong base. He has been investing steadily on both of them for quite a while.

“I think the tastes Kraft and Heinz appeal to are pretty enduring,” Buffett said in a telephone call to the business news channel CNBC.

Kraft Heinz will maintain headquarters in Pittsburgh, where Heinz is based, and also in the Chicago area, where Kraft resides.