In the red zone: Heinz sale gives rise to mixed feelings
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In Britain, the H.J. Heinz Co. has been known by a slogan said to have been dreamed up in a pub: "Beanz Meanz Heinz." In the proud American city where the company was founded in 1869, the now international corporation means so much more than 57 varieties. In truth, Heinz Meanz Pittsburgh.
Its imprint is everywhere. Its name is on the holy of holies where the Steelers and their faithful gather during the football season. Traffic reporters still refer to the Heinz plant on the North Side, although Heinz no longer owns the building. With every dollop of ketchup, Pittsburghers remember that the company's history is mixed with their own.
And that is why a quiet shudder went through this community when it was first announced Thursday that Heinz had been bought by Berkshire Hathaway, headed by the legendary investor Warren Buffett, and 3G Capital, a New York firm with other famous brands in its portfolio. For the price of $28 billion including the assumption of its outstanding debt, Heinz will move from being a public company to a private one, assuming regulatory and shareholder approval.
The deal makes eminent sense from a financial point of view -- as the stock market duly confirmed. In the first place, the offer was a generous one. As Heinz CEO Bill Johnson said, "The value opportunity for shareholders was too great to pass up." Moreover, the new owners are respected and analysts believe going private will give the corporation more flexibility.
Whatever it may mean for Pittsburgh, the deal may bring with it some form of restructuring, perhaps selling some parts of the business and shedding jobs. It is ever thus, of course, when companies are sold. The sale may be the compliment that investment capital pays to the company's productivity and excellence -- but future uncertainty is cause for the shudder.
Mr. Johnson acknowledged the concern when he addressed employees, some face to face and others electronically on six continents across the scattered Heinz empire, becoming tearful as he spoke of their dedication. Who knows how it will be rewarded now.
In one significant way Mr. Johnson did Pittsburgh a big favor -- and for that he deserves the region's thanks. He announced that keeping the company's headquarters here was in the contract. "I told them Pittsburgh was non-negotiable." On an iconoclastic day, and beyond the strictly financial considerations, that was the best piece of good news about this Pittsburgh icon.
First Published February 17, 2013 12:00 am