Creating a buzz throughout the global food industry, the H.J. Heinz Company and Kraft Foods Group, Inc. announced a merger deal Wednesday to create The Kraft Heinz Company, financed in part by American business mogul Warren Buffet. It will be the third-largest food and beverage company in North America.

Under the terms of the $36 billion agreement, Heinz shareholders will own a 51 percent stake in the new company, while Kraft shareholders will own 49 percent. Kraft shareholders will receive stock in the combined company and a special cash dividend of $16.50 per share, funded by an equity contribution from 3G Capital and Buffet’s Berkshire Hathaway.

“I am delighted to play a part in bringing these two winning companies and their iconic brands together,” Buffett says. “This is my kind of transaction, uniting two world-class organizations and delivering shareholder value. I’m excited by the opportunities for what this new combined organization will achieve.”

3G Capital, already a key Heinz investor, made headlines last year when it purchased Tim Hortons, merging the company with Burger King, which 3G acquired in 2010.

The combination of Heinz and Kraft will create a global powerhouse—the fifth-largest food and beverage company in the world—joining iconic brands including Heinz, Kraft, Oscar Mayer, Ore-Ida and Philadelphia. According to the companies, together they will have eight $1+ billion brands and five brands between valued at between $500 million and $1 billion.

The new publicly traded company, which projects revenues of approximately $28 billion, will be co-headquartered out of Pittsburgh and Chicago, a decision the companies say respects the heritage and hometowns of their original communities. In a call with media representatives, company officials said it is too early to tell how the transaction will impact employment and facilities.

“By bringing together these two iconic companies through this transaction, we are creating a strong platform for both US and international growth,” says Alex Behring, chairman of Heinz and the managing partner at 3G Capital. “Our combined brands and businesses mean increased scale and relevance both in the US 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.”

Global Intelligence provider MarketResearch says this deal will “allow both companies to grow even faster than they are now. Together, they will be able to face evolving consumer preferences and trends.”

However, according to MarketResearch, both companies—being over 100 years old—have an “old-school” way of thinking that needs to change to keep up with Millennial shoppers. “Shoppers have been moving away from buying pantry items to purchase less processed foods,” MarketResearch says. “Together, this merged company will need to find new ways to attract the natural foods consumer.”

At the close of the transaction, Behring will become the chairman of The Kraft Heinz Company. John Cahill, Kraft chairman and CEO, will become vice chairman and chair of a newly formed operations and strategy committee of the board of directors. Bernardo Hees, CEO of Heinz, will be appointed CEO of The Kraft Heinz Company. A new executive team for the combined company will be announced at a later date.

The new company’s board will include five members appointed by the current Kraft and Heinz boards, three members from Berkshire Hathaway and three members from 3G Capital.

 The transaction is subject to regulatory and Kraft shareholder approvals. The companies expect the transaction to close in the second half of this year.