Warren Buffett's Berkshire Hathaway Inc. and private equity firm 3G Capital will buy ketchup and baby food maker H.J. Heinz Co. for $23.2 billion in cash, Reuters reported.
Heinz valued the transaction, which it called the largest in its industry's history, at $28 billion. Berkshire and 3G will pay $72.50 per share, a 19 percent premium to the stock's previous all-time high.
Analysts said the deal could be the first step in a broader wave of mergers for the food and beverage industry.
The surprise purchase seems to satisfy Buffett's hunt for growth through acquisition.
Berkshire is putting up about $12 billion to $13 billion cash, Buffett said, leaving it room for another major transaction.
Berkshire already has a variety of food assets, including Dairy Queen, See's Candies and food distributor McLane.