HJ Heinz Co. said 11 executives are leaving as the world’s largest ketchup maker shakes up management less than a month after being acquired by Jorge Paulo Lemann’s 3G Capital and Warren Buffett’s Berkshire Hathaway Inc. (A:US)
Dave Woodward, the chief executive officer of Europe, General Counsel Ted Bobby and North America CEO David Moran are among those departing, the Pittsburgh-based company said today in a statement. Matt Hill was promoted to president of Europe from a post overseeing the U.K. and Ireland. Dan Shaw was named general counsel. Brendan Foley was promoted to zone president of Heinz North America from president of U.S. consumer products.
The transition “demonstrates the power and potential of meritocracy at work here,” Heinz CEO Bernardo Hees said in the statement. “As shown through today’s various internal promotions and appointments, the company is focused on rewarding and promoting the best and brightest talent.”
Buffett, 82, is betting on 3G to wring profit from Heinz after the $28.8 billion takeover, which included debt financing. He said last month that he agreed to the acquisition because of his confidence that Lemann’s firm would run the business well.
“They are extraordinary managers,” Buffett said May 4 at Berkshire’s annual meeting in Omaha, Nebraska, where the company is based. “We stretched a little because of that.”
Berkshire and 3G each contributed about $4 billion to get half the equity in Heinz’s new holding company. In addition, Buffett committed $8 billion for preferred shares that pay a 9 percent dividend and give him the option to buy an additional 5 percent stake for a “nominal sum.”
3G had already moved to shake up management at Heinz, naming Hees as CEO and Paulo Basilio as chief financial officer. The managers replaced William Johnson, Heinz’s CEO of 15 years, and former CFO Art Winkleblack. Hees was previously CEO at Burger King Worldwide Inc. (BKW:US), which 3G bought in October 2010.
Heinz listed 10 executives who will be on the senior leadership team, in addition to Basilio and Hees. Nine of the 10 were previously at the ketchup maker.
The newcomer is Eduardo Pelleissone, who joined from Brazilian freight company ALL America Latina Logistica SA, to be executive vice president of operations. Heinz CFO Basilio previously led ALL.
Andy Keatings, the chief quality officer who has worked at Heinz since 1994, joins the leadership team and will be in charge of maintaining food safety and managing risk globally. He will have a “dotted-line reporting relationship” with the board (HNZ:US), which includes Buffett and Lemann, 73.
Other appointments include new zone presidents for Russia, Turkey, the Middle East and Africa; Latin America; and Asia Pacific. Heinz said it would name leaders for vacant business units soon.
Heinz has “attractive future growth opportunities in emerging markets such as Brazil, Russia and Indonesia,” Moody’s Investors Service said yesterday in a note. “New and ongoing cost savings initiatives under the new ownership will be a key driver of earnings growth and financial deleveraging.”
3G has moved quickly to shake up management in the past. Within two months of buying Burger King, Lemann’s company cut 413 jobs at the restaurant chain’s North American and Latin American operations, including jobs at headquarters in Miami. It also said it would reduce spending on travel, rent and other items to save $30 million to $40 million a year.
Burger King’s employee count fell about 12 percent to 34,248 from mid-2010 through 2011, according to regulatory filings (BKC:US). Lemann’s firm sold part of its stake in the chain last year in an initial public offering.
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