The Kraft Heinz Company (“Kraft Heinz”) (Nasdaq: KHC)
announced today that Kraft Heinz Foods Company, its 100% owned
subsidiary (the “Issuer”), has commenced an offer to
purchase for cash (the “Tender Offer”) up to the maximum
combined aggregate purchase price of $2.0 billion, including
principal and premium but excluding accrued and unpaid interest
(the “Maximum Tender Amount”), of its 3.500% Senior Notes
due June 2022 (the “June 2022 Notes”), 4.625% Senior Notes
due January 2029 (the “January 2029 Notes”), 4.250% Senior
Notes due March 2031 (the “March 2031 Notes”), 6.750% Senior
Notes due March 2032 (the “March 2032 Notes”), 5.000% Senior
Notes due July 2035 (the “July 2035 Notes”), 6.500% Senior
Notes due February 2040 (the “February 2040 Notes”), 5.000%
Senior Notes due June 2042 (the “June 2042 Notes”), 5.200%
Senior Notes due July 2045 (the “July 2045 Notes”), 6.875%
Senior Notes due January 2039 (the “January 2039 Notes”),
7.125% Senior Notes due August 2039 (the “August 2039
Notes”), 5.500% Senior Notes due June 2050 (the “June 2050
Notes”), and 4.875% Senior Notes due October 2049 (the
“October 2049 Notes” and, together with the June 2022 Notes,
the January 2029 Notes, the March 2031 Notes, the March 2032 Notes,
the July 2035 Notes, the February 2040 Notes, the June 2042 Notes,
the July 2045 Notes, the January 2039 Notes, the August 2039 Notes,
and the June 2050 Notes, the “Notes,” and each, a
“Series” of Notes). Subject to the Maximum Tender Amount,
the amount of a Series of Notes that is purchased in the Tender
Offer will be based on the Acceptance Priority Levels set forth
below. The Tender Offer is being made on the terms and subject to
the conditions set forth in the offer to purchase dated November
18, 2021 (the “Offer to Purchase”). Capitalized terms used
in this release but not otherwise defined have the meaning given in
the Offer to Purchase.
Consummation of the Tender Offer and payment for the Notes
accepted for purchase are subject to the satisfaction or waiver of
certain conditions described in the Offer to Purchase, including
among other things, the receipt of proceeds upon completion of a
transaction involving the sale of certain assets in Kraft Heinz’s
global cheese business and the license of certain trademarks,
pursuant to a definitive agreement with an affiliate of Groupe
Lactalis, as announced by Kraft Heinz in September 2020 (the
“Financing Condition”). Subject to applicable law, the
Issuer has reserved the absolute right, in its sole discretion, to
at any time (i) waive any and all conditions to the Tender Offer,
including the satisfaction of Financing Condition, (ii) extend,
terminate, or withdraw the Tender Offer, (iii) increase or waive
the Maximum Tender Amount, with or without extending the Withdrawal
Date (as defined below), or (iv) otherwise amend the Tender Offer
in any respect.
The Tender Offer will expire at 11:59 p.m., New York City time,
on December 16, 2021, unless extended or earlier terminated as
described in the Offer to Purchase (such time and date, as they may
be extended, the “Expiration Time”). Notes tendered at or
prior to 5:00 p.m., New York City time, on December 2, 2021 (such
date and time, as the same may be extended, the “Withdrawal
Date”) may be validly withdrawn at any time at or prior to the
Withdrawal Date, but not thereafter, except in certain limited
circumstances where the Issuer determines that additional
withdrawal rights are required by law. Holders of the Notes
(“Holders”) are urged to read the Offer to Purchase
carefully before making any decision with respect to the Tender
Offer.
Certain information regarding the Notes and the Tender Offer is
set forth in the table below.
CUSIP No. / ISIN
Title of Security
Principal Amount
Outstanding
Acceptance Priority
Level
Reference Treasury
Security
Bloomberg Reference
Page
Fixed Spread (bps)
Early Tender
Premium(1)(2)
Hypothetical Total
Consideration(3)
50076QAZ9 / US50076QAZ90
(144A): 50076QAF3 /
US50076QAF37
(Reg S): U5009CAC4 /
USU5009CAC48
3.500% Senior Notes due June
2022
$631,263,000
1
0.375% U.S. Treasury due October
31, 2023
FIT1
-35
$30.00
$1,016.65
50077LAT3 / US50077LAT35
4.625% Senior Notes due January
2029
$725,402,000
2
1.375% U.S. Treasury due November
15, 2031
FIT1
+65
$30.00
$1,149.14
50077LBF2 /
US50077LBF22
4.250% Senior Notes due March
2031
$1,350,000,000
3
1.375% U.S. Treasury due November
15, 2031
FIT1
+90
$30.00
$1,137.73
42307TAG3 / US42307TAG31
6.750% Senior Notes due March
2032
$370,950,000
4
1.375% U.S. Treasury due November
15, 2031
FIT1
+95
$30.00
$1,374.55
50077LAL0 /
US50077LAL09
5.000% Senior Notes due July
2035
$784,458,000
5
1.375% U.S. Treasury due November
15, 2031
FIT1
+110
$30.00
$1,249.08
50076QAN6 / 50076QAM8 /
US50076QAN60 / US50076QAM87
(144A): 50076QAL0 /
US50076QAL05
(Reg S): U5009CAE0 /
USU5009CAE04
6.500% Senior Notes due February
2040
$706,379,000
6
1.750% U.S. Treasury due August
15, 2041
FIT1
+120
$30.00
$1,439.38
50076QAE6 / US50076QAE61
(144A): 50076QAC0 /
US50076QAC06
(Reg S): U5009CAB6 /
USU5009CAB64
5.000% Senior Notes due June
2042
$1,531,918,000
7
1.750% U.S. Treasury due August
15, 2041
FIT1
+125
$30.00
$1,247.82
50077LAM8 / US50077LAM81
(144A): 423074AV5 /
US423074AV57
(Reg S): U42314AC5 /
USU42314AC51
5.200% Senior Notes due July
2045
$1,810,696,000
8
2.000% U.S. Treasury due August
15, 2051
FIT1
+135
$30.00
$1,289.48
50076QAR7 / US50076QAR74
(144A): 50076QAP1 /
US50076QAP19
(Reg S): U5009CAF7 /
USU5009CAF78
6.875% Senior Notes due January
2039
$810,759,000
9
1.750% U.S. Treasury due August
15, 2041
FIT1
+110
$30.00
$1,486.45
42307TAH1 / US42307TAH14
7.125% Senior Notes due August
2039
$859,264,532
10
1.750% U.S. Treasury due August
15, 2041
FIT1
+110
$30.00
$1,530.96
50077LBJ4 / US50077LBJ44
(144A): 50077LBG0 /
US50077LBG05
(Reg S): U5009LBC3 /
USU5009LBC38
5.500% Senior Notes due June
2050
$800,000,000
11
2.000% U.S. Treasury due August
15, 2051
FIT1
+150
$30.00
$1,347.60
50077LAZ9 /
US50077LAZ94
(144A): 50077LAY2 /
US50077LAY20
(Reg S): U5009LAZ3 /
USU5009LAZ32
4.875% Senior Notes due October
2049
$1,500,000,000
12
2.000% U.S. Treasury due August
15, 2051
FIT1
+145
$30.00
$1,243.81
________________________
(1)
The Total Consideration for each Series
validly tendered prior to or at the applicable Early Tender Time
and accepted for purchase is calculated using the applicable Fixed
Spread and is inclusive of the applicable Early Tender Premium.
(2)
Per $1,000 principal amount of Notes
validly tendered and not validly withdrawn at or prior to the Early
Tender Time and accepted for purchase.
(3)
Hypothetical Total Consideration as of
10:00 a.m., New York City time, on November 17, 2021 and assuming
Early Settlement Date of December 6, 2021.
Holders who validly tender and do not validly withdraw their
Notes at or prior to 5:00 p.m., New York City time, on December 2,
2021, unless extended with respect to any Series of Notes (such
date and time, as the same may be extended, the “Early Tender
Time”) or earlier terminated by the Issuer, will be eligible to
receive the applicable Total Consideration, which includes the
applicable Early Tender Premium as set forth in the table above.
The applicable Total Consideration for each $1,000 principal amount
of Notes validly tendered and accepted for purchase will be
determined in the manner described in the Offer to Purchase by
reference to the applicable Fixed Spread specified on the front
cover of the Offer to Purchase over the applicable Reference Yield
based on the bid-side price of the applicable Reference Treasury
Security specified on the front cover of the Offer to Purchase, as
calculated by the Lead Dealer Managers (as defined below) at 10:00
a.m., New York City time, on December 3, 2021 (subject to certain
exceptions set forth in the Offer to Purchase, such time and date,
as the same may be extended the “Price Determination Date”).
Holders who validly tender their Notes after the Early Tender Time
and at or prior to the Expiration Time will be entitled to receive
only the applicable Tender Offer Consideration, which is equal to
the applicable Total Consideration minus the applicable Early
Tender Premium.
For Notes validly tendered at or prior to the Early Tender Time,
and not subsequently validly withdrawn and that are accepted for
purchase, the Issuer has the option for settlement to occur on the
Early Settlement Date, which is expected to be December 6, 2021,
the second business day following the Early Tender Time. In the
event we choose to have an Early Settlement Date, settlement for
Notes validly tendered after the Early Tender Time, but at or prior
to the Expiration Time, is expected to occur on December 20, 2021,
the second business day following the Expiration Time, unless
extended.
In addition to the Total Consideration or the Tender Offer
Consideration, as applicable, all Notes accepted for purchase
pursuant to the Tender Offer, will, on the Early Settlement Date or
the Final Settlement Date, as applicable, also receive accrued and
unpaid interest in respect of such Notes from the last interest
payment date to, but not including, the applicable Settlement
Date.
Subject to the Maximum Tender Amount, the application of the
Acceptance Priority Levels, and the other terms and conditions
described in the Offer to Purchase, the Issuer intends to accept
for purchase all Notes validly tendered and not validly withdrawn
at or prior to the Early Tender Time. However, if the Tender Offer
is fully subscribed as of the Early Tender Time, Holders who
validly tender their Notes after the Early Tender Time will not
have any of their Notes accepted for purchase. Notes validly
tendered and not validly withdrawn at or prior to the Early Tender
Time will be accepted for purchase in priority to the Notes validly
tendered after the Early Tender Time and at or prior to the
Expiration Time even if such Notes validly tendered after the Early
Tender Time and at or prior to the Expiration Time have a higher
Acceptance Priority Level than the Notes validly tendered and not
validly withdrawn at or prior to the Early Tender Time. As a
result, each Holder who validly tenders Notes pursuant to the
Tender Offer may have a portion of its Notes returned to it, and
the amount of Notes returned will depend on the level of
participation of Holders in the Tender Offer. The Tender Offer may
be subject to proration if the aggregate purchase price (including
principal and premium but excluding accrued and unpaid interest) of
the Notes that are validly tendered and not validly withdrawn is
greater than the Maximum Tender Amount.
Kraft Heinz has engaged Citigroup Global Markets Inc.
(“Citigroup”), Morgan Stanley & Co. LLC (“Morgan
Stanley”), and RBC Capital Markets, LLC (“RBC Capital
Markets”) to act as lead dealer managers (collectively, the
“Lead Dealer Managers”) and Barclays Capital Inc., Credit
Agricole Securities (USA) Inc., Credit Suisse Securities (USA) LLC,
Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., Mizuho
Securities USA LLC, Santander Investment Securities Inc., SMBC
Nikko Securities America, Inc. and Wells Fargo Securities, LLC to
act as co-dealer managers (collectively, the “Co-Dealer
Managers” and, together with the Lead Dealer Managers, the
“Dealer Managers”) in connection with the Tender Offer and
has appointed Global Bondholder Services Corporation to serve as
the Tender Agent and Information Agent for the Tender Offer. Copies
of the Offer to Purchase are available at https://www.gbsc-usa.com/kraftheinzcompany/ or by
contacting Global Bondholder Services Corporation via telephone at
+1 (866) 470-3800 (toll free) or +1 212-430-3774 (for banks and
brokers). Questions regarding the terms of the Tender Offer should
be directed to Citigroup at (800) 558-3745 (toll-free) or (212)
723-6106 (collect); Morgan Stanley at (800) 624-1808 (toll-free) or
(212) 761-1057 (collect); and RBC Capital Markets at (877) 381-2099
(toll-free) or (212) 618-7843 (collect).
None of the Issuer, Kraft Heinz, their boards of directors or
boards of managers, as applicable, the Dealer Managers, Global
Bondholder Services Corporation, the Trustees for the Notes, or any
of their respective affiliates, is making any recommendation as to
whether Holders should tender any Notes in response to the Tender
Offer. Holders must make their own decision as to whether to tender
any of their Notes and, if so, the principal amounts of Notes to
tender.
This press release is for informational purposes only and is not
an offer to purchase, a solicitation of an offer to purchase, or a
solicitation of consents with respect to any securities. This press
release does not describe all the material terms of the Tender
Offer, and no decision should be made by any Holder on the basis of
this press release. The terms and conditions of the Tender Offer
are described in the Offer to Purchase, and this press release must
be read in conjunction with the Offer to Purchase. The Offer to
Purchase contains important information that should be read
carefully before any decision is made with respect to the Tender
Offer. The Tender Offer is not being made in any jurisdiction in
which, or to or from any person to or from whom, it is unlawful to
make such offer or solicitation under applicable securities or blue
sky laws. If any Holder is in any doubt as to the contents of this
press release, or the Offer to Purchase, or the action it should
take, the Holder should seek its own financial and legal advice,
including in respect of any tax consequences, immediately from its
stockbroker, bank manager, solicitor, accountant, or other
independent financial, tax, or legal adviser. Any individual or
company whose Notes are held on its behalf by a broker, dealer,
bank, custodian, trust company, or other nominee must contact such
entity if it wishes to tender such Notes pursuant to the Tender
Offer.
ABOUT THE KRAFT HEINZ COMPANY
We are driving transformation at The Kraft Heinz Company
(Nasdaq: KHC), inspired by our Purpose, Let’s Make Life Delicious.
Consumers are at the center of everything we do. With 2020 net
sales of approximately $26 billion, we are committed to growing our
iconic and emerging food and beverage brands on a global scale. We
leverage our scale and agility to unleash the full power of Kraft
Heinz across a portfolio of six consumer-driven product platforms.
As global citizens, we’re dedicated to making a sustainable,
ethical impact while helping feed the world in healthy, responsible
ways. Learn more about our journey by visiting
www.kraftheinzcompany.com or following us on LinkedIn and
Twitter.
Forward-Looking Statements
This press release contains a number of forward-looking
statements. Words such as “plan,” “believe,” “anticipate,”
“reflect,” “invest,” “see,” “make,” “expect,” “deliver,” “drive,”
“improve,” “intend,” “assess,” “remain,” “evaluate,” “establish,”
“focus,” “build,” “turn,” “expand,” “leverage,” “grow,” “will,”
“maintain,” “manage,” and variations of such words and similar
future or conditional expressions are intended to identify
forward-looking statements. Examples of forward-looking statements
include, but are not limited to, statements regarding Kraft Heinz’s
plans, impacts of accounting standards and guidance, growth, legal
matters, taxes, costs and cost savings, impairments, dividends,
expectations, investments, innovations, opportunities,
capabilities, execution, initiatives, and pipeline. These
forward-looking statements reflect management’s current
expectations and are not guarantees of future performance and are
subject to a number of risks and uncertainties, many of which are
difficult to predict and beyond Kraft Heinz’s control.
Important factors that may affect Kraft Heinz’s business and
operations and that may cause actual results to differ materially
from those in the forward-looking statements include, but are not
limited to, market conditions and the timing and ability of the
Issuer to consummate the Tender Offer; the impacts of COVID-19 and
government and consumer responses; operating in a highly
competitive industry; Kraft Heinz’s ability to correctly predict,
identify, and interpret changes in consumer preferences and demand,
to offer new products to meet those changes, and to respond to
competitive innovation; changes in the retail landscape or the loss
of key retail customers; changes in Kraft Heinz’s relationships
with significant customers or suppliers, or in other business
relationships; Kraft Heinz’s ability to maintain, extend, and
expand its reputation and brand image; Kraft Heinz’s ability to
leverage its brand value to compete against private label products;
Kraft Heinz’s ability to drive revenue growth in its key product
categories or platforms, increase its market share, or add products
that are in faster-growing and more profitable categories; product
recalls or other product liability claims; Kraft Heinz’s ability to
identify, complete, or realize the benefits from strategic
acquisitions, alliances, divestitures, joint ventures, or other
investments; Kraft Heinz’s ability to successfully execute its
strategic initiatives; the impacts of Kraft Heinz’s international
operations; Kraft Heinz’s ability to protect intellectual property
rights; Kraft Heinz’s ownership structure; Kraft Heinz’s ability to
realize the anticipated benefits from prior or future streamlining
actions to reduce fixed costs, simplify or improve processes, and
improve its competitiveness; Kraft Heinz’s level of indebtedness,
as well as our ability to comply with covenants under our debt
instruments; additional impairments of the carrying amounts of
goodwill or other indefinite-lived intangible assets; foreign
exchange rate fluctuations; volatility in commodity, energy, and
other input costs; volatility in the market value of all or a
portion of the commodity derivatives we use; compliance with laws
and regulations and related legal claims or regulatory enforcement
actions; failure to maintain an effective system of internal
controls; a downgrade in Kraft Heinz’s credit rating; the impact of
future sales of Kraft Heinz’s common stock in the public market;
Kraft Heinz’s ability to continue to pay a regular dividend and the
amounts of any such dividends; unanticipated business disruptions
and natural events in the locations in which Kraft Heinz or Kraft
Heinz’s customers, suppliers, distributors, or regulators operate;
economic and political conditions in the United States and in
various other nations where Kraft Heinz does business; changes in
Kraft Heinz’s management team or other key personnel and Kraft
Heinz’s ability to hire or retain key personnel or a highly skilled
and diverse global workforce; risks associated with information
technology and systems, including service interruptions,
misappropriation of data, or breaches of security; increased
pension, labor, and people-related expenses; changes in tax laws
and interpretations; volatility of capital markets and other
macroeconomic factors; and other factors. For additional
information on these and other factors that could affect the Kraft
Heinz’s forward-looking statements, see Kraft Heinz’s risk factors,
as they may be amended from time to time, set forth in its filings
with the Securities and Exchange Commission. Kraft Heinz disclaims
and does not undertake any obligation to update, revise, or
withdraw any forward-looking statement in this press release,
except as required by applicable law or regulation.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211118006300/en/
Alex Abraham (media) Alex.Abraham@kraftheinz.com
Christopher Jakubik, CFA (investors) ir@kraftheinz.com
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