This is a rush transcript from "Your World," February 14, 2013. This copy may not be in its final form and may be updated.
NEIL CAVUTO, HOST: Let's just say yummy, the sage finding his American saint, and apparently he's ordering extra ketchup.
Warren Buffett's Berkshire Hathaway teaming up with Brazilian-backed investment firm 3G Capital to scoop up food giant H.J. Heinz for a cool $23 billion. That works out to about $72.50-a-share, Buffett says money well spent, because the Heinz name is so iconic. It's a virtual one-stop food super store whose brands include everything from ketchup Ore-Ida potato products, TGI Friday's snacks, Weight Watchers smart meals.
To the man who made the feast that apparently whet the sage of Oracle's appetite, first on Fox, Heinz CEO William Johnson.
BILL JOHNSON, CHAIRMAN & CEO, H.J. HEINZ COMPANY: Thank you very much, Neil. Good to be back.
CAVUTO: Well, you always had the great staple of products and it's no mystery Warren Buffett of course loves food, iconic names. And yours was always out there, but something got you interested in this. What?
JOHNSON: Well they first approached me about six or eight weeks ago.
And they laid out the beginning of a proposal which then formally sent to us a week or so later. And I think the thing that got my attention was, one, I wanted a commitment to keep the business in Pittsburgh, which they gave me. I wanted a commitment to be as generous as I could with our employees, and I wanted a commitment that we would continue to drive growth on a global basis.
And then they gave us a price that I took to the board and the board was compelled to go forward with. I think it's just a great deal for our shareholders, it's a wonderful deal for our employees, it's a wonderful deal for the city of Pittsburgh.
It's just a terrific deal with terrific people, and the Berkshire Hathaway people led by Warren Buffett and by the 3G people.
CAVUTO: We should say it was obviously an eye-poppingly attractive offer to the board. This is a 20 percent premium in just the last day alone.
Having said that, what do you think is going on here? Did the environment economically compel this move? I asked the same of these -- two airline giants who are getting together, American Airlines and U.S. Air, whether that propelled doing a deal sooner rather than later because, well, in this environment, either you don't know what your alternatives are or you just feel you should entertain these things more than you normally would?
What was behind it?
JOHNSON: Well, I think, Neil, in our case it's a little different.
We're being acquired from a position of great strength. We have had a great consecutive run of high, excellent performance and we have also traded at a high stock price. And so I think in our case it was just the opportunity when 3G approached Mr. Buffett about getting together and acquiring what is my view one of the two or three great brands in the world, certainly one of the leading brands in the United States and in the U.K. and in the rest of the world.
And I think the opportunity just matched the time and matched the lending conditions available and I just think they thought it was an opportune time to go forward.
CAVUTO: One could step back probably from this deal, Bill, and say well, obviously the big deals are back, whether it's Dell trying to take itself private for a similar sum here in reverse, I guess, and some of these other airlines deals we alluded to, that maybe something's in the water and this is a sign of a new era.
What do you say?
JOHNSON: I don't know that that's true necessarily, Neil.
Again, I think in our case, it's the highest price ever paid for a food business in the global food industry. It's at an all-time high, at $28 billion. It is a terrific deal. And so in our case, it's a really enhancing deal four shareholders. Some of the other deals that have been done are businesses that are more troubled or have had more difficult conditions in which to operate.
Again, I just think Mr. Buffett and the 3G Capital people saw an opportunity to acquire a wonderful brand and take it to levels that maybe we couldn't take it to on our own.
CAVUTO: I also -- and this is me interpreting here. You're the expert. As you know, Bill, I play one on TV and read a prompter.
CAVUTO: So, I'm wondering if part of this might be you can never go wrong betting on food. People, in good times and bad, they have to eat. And if you're worried that the economy might slow down and you're worried things might we globally bumpy, invariably, people will still have to eat and you have got to find a safe cushion for your money and Heinz is at the very least that, and Warren Buffett is at the very least astute.
What say you?
JOHNSON: Well, I certainly think he's astute.
And I think it's the great iconic stature of our brand, and Mr. Buffett and 3G Capital like great brands. And this brand has been around for 144 years. It continues to grow in stature and in equity and we continue to penetrate new markets.
And I think the view is we're still penetrating less than two or three billion people. And so there's only another 3.5 billion people to go. And so I think from that standpoint, you can't go wrong with great brands. Neil, it's just been proven time and time again in history.
And Mr. Buffett and 3G Capital are people who are astute enough to recognize that and I think saw a real opportunity.
CAVUTO: All right. well, I want to see family discontent here, if I can, and venture into politics. Warren Buffett, as you know, was a fan of raising taxes on the upper income, said that the nation could afford it, they could afford it, the economy could afford it.
And the proof is in the pudding, the improvement in the markets, maybe the improvement in the economy. What do you think of that?
JOHNSON: Well, I don't know. It's hard to argue with the Oracle of Omaha. He's been right on a lot of things.
CAVUTO: But you can go ahead. This whole deal can be unraveled right here, Bill. Go ahead.
JOHNSON: I think we will choose not to do that, Neil.
JOHNSON: I think what we will choose to do is say I had lunch with Mr. Buffett on Monday, I couldn't have been more thoroughly entertained and more thoroughly impressed with his knowledge of a variety of subjects, including things as arcane as Marshall Goldberg, who used to play for the University of Pittsburgh football team.
Mr. Buffett actually was a ball boy for the Washington Redskins. I mean our lunch was really a compendium of those kinds of interesting things. And while I don't necessarily agree with him on his tax comment, I can tell you that I certainly pay more than 30 percent. I pay more than my secretary does.
JOHNSON: So, I think, at the end of the day, I don't know the relevance of that, but you can't argue with success of the markets recently.
CAVUTO: All right.
Well, my biggest thing with you, Bill, is that you have been in the food business all these years and you're not fat. But that troubles me deeply.
CAVUTO: But continued success and thank you very much for joining us.
JOHNSON: Thank you, as always, Neil, for having me. And continued good luck with your show. I think it's a wonderful show.
CAVUTO: I appreciate that, Bill Johnson, the Heinz CEO, the man behind one of the biggest food deals in history.
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