Kraft withdraws $143-bn Unilever bid

WASHINGTON: US food giant Kraft Heinz has dropped its bid to buy Unilever days after it rejected a $143-billion buyout offer, the companies said on Sunday.

Kraft Heinz had signalled on Friday that it would press ahead with its campaign after the British-Dutch consumer products manufacturer said the initial proposal “fundamentally undervalues” its worth.

However, strong resistance from Unilever reportedly persuaded Kraft Heinz over the weekend to back out.

“Unilever and Kraft Heinz hereby announce that Kraft Heinz has amicably agreed to withdraw its proposal for a combination of the two companies,” the joint statement said, “Unilever and Kraft hold each other in high regard. Kraft has the utmost respect for the culture, strategy and leadership of Unilever.”

Unilever’s London-listed shares, which jumped 13% to a record high when the bid was made public on Friday, fell 8% to give it a market value of 100 billion pounds, after Kraft said it was withdrawing the proposal.

The deal would have created a giant in global food — second only to Nestle — joining the maker of Kraft cheese and Heinz ketchup to its European counterpart, whose products include Q-tips, Hellmann’s mayonnaise and Ben & Jerry’s ice cream.

Analysts had said the potential merger — which would have been one of the largest corporate deals in history — could have raised red flags for antitrust regulators over the effect on consumers, and for politicians given the possibly large job cuts.

Kraft Heinz is the fifth-biggest food and beverage company in the world. It was formed by the 2015 merger struck between Heinz’s controlling shareholders, Warren Buffet’s Berkshire Hathaway, and 3G Capital of Brazil.

AFP Kraft wanted to buy Unilever as part of its strategy to become a global consumer goods giant by buying competitors and cutting costs and jobs to drive profits