US food giant Heinz is to merge with Kraft Foods Group, creating what the companies say will be the third-largest food and beverage company in the US. Shares in Kraft closed up more than 35% on the news at $83.17 in New York. The deal was engineered by Heinz's owners, the Brazilian investment firm 3G Capital, and billionaire investor Warren Buffett's Berkshire Hathaway. Heinz shareholders will own 51% of the combined company with Kraft shareholders owning a 49% stake. The combined firm, Kraft Heinz Company, expects to make annual cost savings of $1.5bn (£1bn) by the end of 2017.