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By Jason Stipp and Jeremy Glaser | 02-15-2013 12:00 PM

The Friday Five

Five stats from the market and the stories behind them. This week: Berkshire's stake in a $28 billion deal, Avon's not-so-pretty 1% sales growth, and more.

Jason Stipp: I'm Jason Stipp for Morningstar, and welcome to The Friday Five: Five stats from the market and the stories behind them.

Joining me, as always, with the numbers is Morningstar markets editor Jeremy Glaser.

Jeremy, thanks for being here.

Jeremy Glaser: Thanks, Jason.

Stipp: So, what do you have for the Friday Five this week?

Glaser: We're going to look at $28 billion, 26%, minus 0.6%, $16.7 billion, and finally 1%.

Stipp: $28 billion is the elephant size price tag on Heinz. Berkshire Hathaway, in partnership with another group, making that purchase. That news came out on Thursday. What's our take on the deal?

Glaser: This is not an enormously surprising deal in a couple different ways. This is the kind of company that Buffett obviously likes. It's a relatively stable consumer packaged goods company, strong brands. It's the kind of business that you could see him really being able to wrap his head around, and it hasn't been a secret that he has been looking for acquisitions--that he is sitting on this big pile of cash. He knows that there are opportunities. He's said that he has gone after a few deals that have fallen through. So, we shouldn't be shocked to see a deal of this size come from Berkshire.

But some of the terms of it are a little bit different than we have come to expect from him. He is partnering with a private equity firm from Brazil called 3G Partners, and the deal is going to be structured so that a lot of his investment is actually going to be in preferred shares that are going to yield a hefty 9%. I think this shows that he is able to really throw his name and his weight behind these deals to get really preferential terms in order to get boards to agree to the buyout. So, that 9% that he will get on those preferred shares looks a lot better than almost 0% he is going to get if the cash is just sitting there.

Our analyst Gregg Warren, who covers Berkshire, thinks that the price may be a little bit high. They are certainly not getting a big bargain on Heinz. But he expects that because of the yield on these preferred shares and the way it's structured that Berkshire will still come out ahead, but we still need some more details there to see if the valuation is just a little bit too lofty.

Stipp: Also in deal news, an airline merger is going to result in 26% market share for that new company. It seems like a pretty high number, but does this really change the long-term story for this beleaguered industry?

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