H.J. Heinz is expected to buy Kraft Foods Group, creating what would be the third-largest food and beverage company in North America.
The merger deal, announced today by both companies, was engineered by Heinz's owner, the Brazilian investment firm 3G Capital, and billionaire investor Warren Buffett's Berkshire Hathaway, which shares ownership of Heinz.
The combined company's brands include Kraft, Heinz, Oscar Mayer deli meats, Planters nuts and Maxwell House Coffee.
But these are challenging times for packaged food companies. Because of changing consumer tastes many well-known food brands are struggling with declining sales. Kraft’s profit last year fell more than 60 percent.
3G has won praise on Wall Street for deal-making and competent management as well as cost-cutting.
Both companies' boards have unanimously approved the deal, which is targeted to close in the second half of the year. It still needs approval from Kraft shareholders.