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Kraft and Heinz merge to form world's fifth-largest food company

With the merger of Kraft and Heinz, hot dogs and ketchup will now be more connected than ever.

Heinz ketchup is red and Velveeta is yellow, but its parent companies are suddenly looking very green. 

H.J. Heinz Co. will merge with Kraft Foods Group to create North America's third-largest food and beverage company — it will be the fifth largest in the world. The Wednesday announcement bumped shares of Kraft about 17% in pre-market stock trading, according to Reuters. The new entity will be known as Kraft Heinz Company and headed by Heinz Chief Executive Bernardo Hees.

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Kraft, the maker of Oscar Mayer hot dogs and American Singles, which are described on labels as "pasteurized prepared cheese product,” was the target of criticism recently for its negotiations with The Academy of Nutrition and Dietetics. The group is "the world's largest organization of food and nutrition professionals," according to its website. The cheese product purveyor is seeking to have the academy's "Kids Eat Right" endorsement appear on Kraft Singles packages — to the consternation of some food nutrition experts, reported The Wall Street Journal.

Heinz is owned by 3G Capital and Berkshire Hathaway Inc., the company most associated with billionaire business magnate Warren Buffet. He told CNBC that Berkshire Hathaway would own $9.5 billion in common stock in the new company. 

Heinz, best known for making condiments like ketchup, relish and mustard, is headquartered in Pittsburgh and was taken over by 3G and Berkshire two years ago. The merger will make Heinz's shares public again, according to Reuters. 

Heinz shareholders will own 51% of the new company, and Kraft will hold the remaining 49%. Kraft Heinz Company will pull in a joint revenue of $28 billion, according to a statement released by the companies on Wednesday. The merger also brings together eight brands worth more than $1 billion each and five valued at $500 million to $1 billion each, the statement added.