FORTUNE — Two billionaires — business and personal friends who live on separate continents — announced today that their companies would jointly buy H.J. Heinz Co. for $28 billion, including the assumption of $4 billion in debt.
The two dealmakers are Warren Buffett and the Brazilian/Swiss businessman and philanthropist Jorge Paulo Lemann. Buffett’s Berkshire Hathaway (BRKA) will own 50% of the venture, and 3G Capital, in which Lemann is a principal, will hold the remainder.
The Lemann group will also play a role in Heinz’s management, working with the company’s CEO, William R. Johnson.
The all-cash deal will pay Heinz shareholders $72.50 a share, which is just under a 20% premium to Heinz’s closing price yesterday, $60.48. Yesterday’s price was near the all-time high for Heinz, which has roughly doubled since the stock market’s bottom in March, 2009.
Heinz, a multinational with a growing presence in emerging markets, had revenues of $11.6 billion and net income of nearly $1.1 billion in its fiscal year ended last May. The company’s biggest seller is its famous ketchup. Among other Heinz products are a variety of sauces, canned goods, and frozen foods including Ore-Ida potatoes and Smart Ones low-calorie entrees.
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With Heinz’s brands in mind, Buffett said today he had reworked a famous line from the 1967 movie The Graduate, in which a businessman tells young jobseeker Benjamin Braddock (Dustin Hoffman) : “I just want to say one word to you. Plastics.” Buffett’s version: “I just want to say one word to you. Ketchup.”
For Buffett and Lemann, the Heinz (HNZ) deal came out of a close friendship that formed between them when both were directors of Gillette Co. in the 1990s and early 2000s. Buffett was on the board because Berkshire then owned close to 10% of Gillette. Lemann’s primary business affiliation at the time was with the Brazilian brewery AmBev.
In 2004, AmBev merged with Belgium’s Interbrew to form InBev, and in 2008 InBev — with Lemann leading the drive — took over Anheuser Busch. The amalgamation of all of these companies formed Anheuser-Busch InBev (BUD), the world’s largest brewer, and a company in which Lemann remains a powerful force.
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On another key front for Lemann, 3G Capital bought control of Burger King in 2010. The chain, fortunate to say, is a large user of Heinz ketchup.
Beyond that cameo example of good judgment, the Lemann troops are known for their tight control of costs and for their focus on creating long-term value. Buffett is in general a great admirer of how his friend — “Georgie Paulo,” as Buffett calls him — manages his businesses.
The Lemann influence will no doubt be felt at Heinz in a major way, because that is the way Lemann works.
Before the Heinz deal came along, Buffett had repeatedly said that he was on the hunt for a large acquisition for Berkshire — “an elephant,” as he termed it. His $14 billion investment in Heinz might not quite have the size to qualify. But at the least the deal could still leave him room to shop for an incontestable elephant.
Fortune senior editor-at-large Carol Loomis, who wrote this article, is a longtime friend of Warren Buffett’s, the pro bono editor of his annual letter to shareholders, and a shareholder in Berkshire Hathaway.
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