H.J. Heinz / Kraft Foods Group Acquisition

Review of S-4 Registration Statement

Questions:

1. List the important terms of the deal as outlined in the S-4 including pricing, structure, method of payment, & other important provisions.

2. Provide a critique of the rationale for the transactions as outlined by both Heinz & Kraft. Are the reasons provided sufficient to justify the deal? Discuss the more relevant risk factors. Which side appears to have had the upper hand in negotiations? Prior to looking at the offer price in more detail, do you think this will be a good deal for Heinz in the long run?

3. Why do you think the Kraft board declined the initial offer?

4. Using the historical financial statements of Kraft Foods, estimate the future cash flows of Kraft Foods using reasonable assumptions. Conduct a DCF / IRR analysis with reasonable terminal value assumptions. Are you satisfied from the perspective of a Heinz shareholder that this merger will create an acceptable rate of return?