It was announced last week that Brazilian private equity firm 3G Capital and Warren Buffet’s Berkshire Hathaway had agreed a deal to take over Heinz a move that is expected to more than double the company’s current debt from $12bn to $23bn.
According to reports in The Wall Street Journal, 3G Capital has a history of quickly cutting costs and paying down the debt acquired through an acquisition.
For example, a few weeks after the company took over Burger King in 2010, the new management team fired around half of the company’s employees based at its headquarters in Miami, implemented a system whereby remaining staff had to have permission before making colour print-outs and any meetings with head-office were carried out via a webcast. This was according to people very familiar with the situation who were speaking with The Wall Street Journal.
Overall 3G has cut Burger King’s operating costs by around 30%.
Speaking to the Wall Street Journal, 3G managing partner Alex Behring said that the company was yet to make a decision on whether a cost-cutting programme would be needed, while Heinz chief executive William Johnson said that it was too early to say what impact the deal might have the company’s employees.
