The Kraft Heinz Co. agreed to pay $450 million to investors to settle a class-action lawsuit led by AP7, Stockholm, a spokesman for the 900 billion Swedish kronor ($85.5 billion) pension fund confirmed.
The case was handled by the U.S. District Court for the Northern District of Illinois. Plaintiffs argued that Kraft Heinz made misleading statements in connection with the 2015 merger of Kraft Foods and Heinz, leading to a significant decline in share price.
Kraft Heinz claimed that following the merger it saw increased profits due to cost-saving synergies between the companies. But instead, heavy cost-cutting measures led to a decline in revenue and the impairment of intangible assets, AP7 said in a news release.
The spokesman did not disclose the size of AP7's investment in the company or its losses.
"We welcome this settlement with Kraft Heinz. It is a clear example of how AP7 uses the opportunity to pursue legal proceedings through class action against companies that treated shareholders incorrectly and negatively affected the share price. It's not all capital owners who pursue lawsuits against companies, but when we win a case like this, it benefits all shareholders," Richard Grottheim, CEO of AP7, said in the release.
A Kraft Heinz spokesman could not be immediately reached to comment about the settlement.