Warren Buffett's Berkshire Hathaway has agreed to buy Heinz for $23bn, a 20% premium to yesterday's closing share price.
Buffett teamed up with investment firm 3G Capital for the merger, agreeing to pay $72.50 a share in cash for the food giant.
The deal is valued at around $28bn including existing debt, making it one of the largest ever seen in the food industry, according to a statement from Heinz.
Heinz said the deal would also be funded by debt financing from J.P. Morgan and Wells Fargo.
The company did not confirm what proportion Berkshire would pay, however CNBC reported each side would put up $4.5bn in cash as part of the purchase.
"It's my kind of deal and it's my kind of partner," said Buffett in an interview with CNBC, adding Berkshire and 3G would be equal equity partners.
The terms of the agreement were unanimously approved by Heinz's board of directors. Heinz chairman, president, and chief executive William Johnson said: "The Heinz brand is one of the most respected brands in the global food industry and this historic transaction provides tremendous value to Heinz shareholders."
Buffett added: "Heinz has strong, sustainable growth potential based on high quality standards, continuous innovation, excellent management and great tasting products."
The deal has proved beneficial for fund managers including Liontrust's Jan Luthman and Stephen Bailey, who own the stock in their Macro UK Growth and Macro UK Income portfolios as part of their overseas allocation.
"People will look at the takeout level for Heinz and see there are other undervalued companies operating in the area," he said.
But the manager is cautious over the prospect of the acquisition having a knock-on effect for consumer staples giants such as Unilever, suggesting the latter's very strong recent run means it may be set for a period of range trading.
The Aviva Investors Multi-asset Funds (MAF) target equity risk rather than absolute volatility. Thomas Wells, Multi-asset Fund Manager, explains that while absolute volatility varies significantly over time, the inherent risk of investing in equities remains relatively constant.
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