--Burger King CEO Bernardo Hees to head Heinz after 3G Capital,
Berkshire Hathaway complete buyout of ketchup maker
--3G Capital controls both Burger King and Heinz
--Mr. Hees's appointment spells end of 15-year tenure for
William Johnson as Heinz CEO
(Adds details on Mr. Hees's tenure at 3G Capital and potential
exit package for Heinz CEO.)
By Paul Ziobro
Brazilian private-equity firm 3G Capital is sliding the chief
executive of Burger King Worldwide Inc. (BKW), which it currently
controls, into the same role at H.J. Heinz Co. (HNZ) once 3G and
Berkshire Hathaway Inc. (BRKA, BRKB) complete their $23 billion
buyout of the ketchup maker.
Bernardo Hees will replace Heinz CEO William Johnson, who has
led the ketchup-maker for 15 years and turned it into more of a
global food company by selling ketchup and other Heinz's products
all across the world. 3G and Warren Buffett's Berkshire Hathaway in
February teamed up to buy Heinz for $72.50 a share in one of the
largest-ever acquisitions in the food industry. The deal is
expected to close sometime this summer, pending shareholder and
regulatory approvals.
Mr. Hees, age 43, comes to Heinz with the reputation of having
cut costs aggressively at Burger King shortly after 3G bought the
burger chain in 2010, taking it private. He got rid of about half
the 600 jobs at Burger King's Miami headquarters and eliminated the
entire executive wing there.
Members of 3G Capital have said they don't necessarily plan to
immediately slash costs at the food maker, which they don't see as
having as much fat as some of their previous acquisitions. But
other food makers like Campbell Soup Co. (CPB) see the acquisition
by 3G as a reminder that they need to continue to be vigilant on
costs to compete in the slow-growing packaged-food industry.
Mr. Hees's appointment spells the end of Mr. Johnson's stint
atop Heinz. 3G and Berkshire Hathaway plan to speak with Mr.
Johnson, age 64, about his interest in working with the company in
some role after the deal closes.
But the appointment of Mr. Hees does appear to set up Mr.
Johnson to rake in an exit package worth more than $200 million,
including a $56 million "golden parachute." A Heinz spokesman
declined to comment about whether this would trigger the
requirements to receive the payout. A securities filing in March
stated that the compensation is paid out if the top officers are
"involuntarily terminated."
Aside from the cost cuts, Mr. Hees has helped Burger King
drastically revamp its menu, offering products like smoothies and
salads to broaden its customer base from its traditional reliance
on young males. Burger King quickly returned to the public markets
less than two years after going private, and has lately been making
up ground on top rival McDonald's Corp. (MCD).
Burger King will continue along the same strategy under Chief
Financial Officer Daniel Schwartz, who is being promoted to chief
operating officer and will become its new CEO July 1.
"We have a sound business strategy in place, and it's working,
so we won't be making any changes in that," Mr. Schwartz said.
While Burger King still has "a lot more ground to gain," it's "on
the right track," he added.
Separately, Burger King said it expects per-share earnings for
its first quarter to be slightly above Street views, but that
same-store sales will decline.
Shares of Burger King are up 2.4% at $18.90, while those of
Heinz are up slightly at $72.33.
-Saabira Chaudhuri and Annie Gasparro contributed to this
article.
Write to Paul Ziobro at paul.ziobro@dowjones.com and Saabira
Chaudhuri at saabira.chaudhuri@dowjones.com
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