Kraft Foods Group and H.J. Heinz Company are to merge and form The Kraft Heinz Company, forming the third largest food and beverage company in North America, Heinz says.

49% of the new company will be owned by Kraft shareholders and current Heinz shareholders will own 51% on a fully diluted basis and Kraft shareholders will receive stock in the combined company and a special cash dividend of $16.50/share, Heinz says.

Heinz says that this special dividend payment, which is worth approximately $10 billion, is being fully funded by an equity contribution by Berkshire Hathaway and 3G Capital (who own Heinz). It says that the special cash dividend payment represents 27% of Kraft’s closing price as of March 24, 2015.

The merger will create the fifth largest food and beverage company in the world and it will have revenues of approximately $28 billion, Heinz says.

Alex Behring, Chairman of Heinz and the Managing Partner at 3G Capital, said that by bringing together these two companies through this transaction, the company is creating a strong platform for both U.S. and international growth.

“Our combined brands and businesses mean increased scale and relevance both in the U.S. and internationally. We have the utmost respect for the Kraft business and its employees, and greatly look forward to working together as we integrate the two companies,” Behring said.

Warren Buffett, Chairman and CEO of Berkshire Hathaway said that this is his kind of transaction, uniting two world-class organizations and delivering shareholder value.

Kraft Chairman and Chief Executive Officer, John Cahill said that together the new company will have some of the most respected, recognized and storied brands in the global food industry, and together it will create an even brighter future.

“This combination offers significant cash value to our shareholders and the opportunity to be investors in a company very well positioned for growth, especially outside the United States, as we bring Kraft’s iconic brands to international markets. We look forward to uniting with Heinz in what will be an exciting new chapter ahead,” he said.