Buffett’s partner 3G in advanced stage of buying Kraft

(Bloomberg) — 3G Capital, the Brazilian private-equity firm, is in advanced talks to acquire Kraft Foods Group Inc. and merge it with ketchup maker H.J. Heinz, a person with knowledge of the matter said.

A deal could be announced as soon as this week, said the person, who asked not to be identified because the information is private. Kraft, based in Northfield, Illinois, closed at $61.33 in New York trading Tuesday, giving the company a market value of about $36 billion. The stock surged 17 percent in extended trading.

Warren Buffett’s Berkshire Hathaway Inc. teamed up with 3G Capital two years ago to acquire Heinz and then helped finance 3G-owned Burger King Worldwide Inc.’s purchase of Canadian coffee-and-doughnut chain Tim Hortons Inc.

Since those deals, speculation has simmered about what they’ll buy next — be it Kellogg Co., Kraft or Mondelez International Inc. Buffett stoked the conversation with his annual letter to Berkshire shareholders, saying he expects to “partner with 3G in more activities.”

The current Kraft was created in a spinoff from Mondelez in October 2012. Mondelez inherited the company’s overseas snack businesses, giving it bigger growth opportunities internationally. Kraft, meanwhile, is focused on the U.S. While Kraft has a stable of household brands, including Velveeta and Philadelphia Cream Cheese, the company has struggled to reignite sales growth in a mature market.

Berkshire began paring its  stake in Kraft Foods Inc. in 2010 after Buffett disagreed with Kraft’s decision to sell its pizza brands to help pay for a takeover of Cadbury Plc. “Both deals were dumb,” he told Berkshire investors at the time.

Berkshire was the biggest shareholder of Kraft with a stake valued at $3.3 billion at the end of December 2010.