US food giant scraps bid to buy owners of PG Tips and Marmite

Kraft Heinz has dropped its £115billion plan to buy Marmite-maker Unilever, which critics feared might lead to price rises and job cuts.

the merger would have been the second biggest takeover in corporate history, combining dozens of household names.

But Kraft Heinz, the global food firm behind Heinz tomato Ketchup and Philadelphia cheese, decided against making a second offer after a ‘comprehensive proposal’ about combining the two companies was rejected by Unilever, the British-Dutch consumer goods giant.

In a joint statement, the companies said: ‘Unilever and Kraft Heinz hereby announce that Kraft Heinz has amicably agreed to withdraw its proposal for a combination of the two companies. Unilever and Kraft Heinz hold each other in high regard.’

the decision will be a relief to Unilever’s 7,500 staff in the UK, who had feared that jobs would have been slashed if the deal went ahead.

the private equity firm behind Kraft is an aggressive cost- cutter led by the Brazilian billionaire Jorge Paulo Lemann, who has previously axed jobs after takeovers.

But the attempted takeover of Unilever, whose other brands include Ben & Jerry’s ice cream, Dove soap, Hellmann’s mayonnaise and PG tips tea, will be seen as a warning to theresa May about the limits of protecting British manufacturing inter- ests. the Prime Minister promised last year to do more to block predatory takeovers when British jobs are at risk, saying: ‘Workers have a stake, local communities have a stake, and often the whole country has a stake.’

She faces a further test of her promise with plans by french carmaker PSa to take over General Motors’ european opera- tion Opel, which includes vauxhall of the UK. former business secretary vince Cable welcomed the news that the Unilever deal was off, but warned that similar takeovers are more likely since the fall in the pound.

‘there remains a strong argument for the Government to tighten up the public interest test for takeovers, given the problem will recur,’ he told the financial times.

If the Unilever deal had gone ahead it would have been the second-biggest takeover in history, behind the £ 147billion swoop on Germany’s Mannesman by vodafone in 2000.

It would have brought dozens of the biggest household name brands under one roof, giving it huge power to dictate prices charged to shoppers.

and it would have ignited fears over the future of British jobs involved in making Unilever products. the firm has its headquarters in London and research facilities at Port Sunlight on Merseyside, Colworth in Bedfordshire and Leeds.

But some experts had pointed out that the deal could have been scuppered by Dutch laws which say that takeover bids cannot be judged only on price.