By Nolan Feeney
Updated: March 25, 2015 7:38 AM ET

Kraft Foods Group, which makes Oscar Mayer meats and macaroni-and-cheese products, will merge with ketchupmaker H.J. Heinz Co. to become the fifth largest food-and-beverage company in the world and the third largest in the U.S.

The new company, the Kraft Heinz Co., will be co-headquartered in the Chicago and Pittsburgh areas and will have revenues of roughly $28 billion, the companies announced in a statement Wednesday. Eight of its combined brands will be worth more than $1 billion each, while five will be worth approximately $500 million to $1 billion each.

Berkshire Hathaway Inc. and Brazilian private-equity firm 3G Capital, which co-own Heinz, will invest an additional $10 billion into the merged company, of which current Heinz and Kraft shareholders will collectively own 51% and 49% respectively. Kraft shareholders will also receive special cash dividends of $16.50 per share.

“This is my kind of transaction, uniting two world-class organizations and delivering shareholder value,” Berkshire Hathaway chairman and CEO Warren Buffett said in a statement. “I’m excited by the opportunities for what this new combined organization will achieve.”

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