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Shares of Kraft Foods (KRFT) surged 35% on Wednesday morning after the company announced that it has entered into a definitive merger agreement with H.J. Heinz.
The two companies will merge to create The Kraft Heinz Company, which will be the third largest food and beverage company in the U.S. Under the agreement, Kraft shareholders will own 49% of the combined company, while Heinz shareholders will own 51% of the company.
Kraft shareholders will receive a $16.50 special dividend, which will be funded by Berkshire Hathaway and 3G Capital.
This deal is expected to close in the second half of 2015.
Shares of KRFT were up $21.27, or 34.53% during premarket trading Wednesday. The stock is down 2.12% YTD.
Kraft Foods (KRFT) is recommended at this time, holding a Dividend.com DARS™ Rating of 3.5 out of 5 stars.