Sainsbury’s boss warns of major regulator threat to Unilever deal

THE boss of Sainsbury’s said he expects competition authorities to have a ‘field day’ after it emerged on Friday that the US owner of Heinz was trying to buy consumer goods giant Unilever.

Unilever’s shares rocketed 13 per cent, valuing it at £108billion, after news broke of an approach from Kraft Heinz.

Any deal would be one of the world’s biggest ever takeovers and would result in a business with annual sales of more than £60billion. Kraft Heinz is majority owned by Berkshire Hathaway – the conglomerate headed by legendary investor Warren Buffett – and investment group 3G Capital, which are believed to be strong supporters of the takeover bid.

Sainsbury’s chief executive, Mike Coupe, said of the bid: ‘Unilever is our biggest supplier. Given that Heinz is also a fairly big supplier, I would imagine the competition authorities would have a lot to say about it and that would be the case in every country they both trade in.

‘Supermarkets are portrayed as having a disproportionate amount of power in supplier relationships, but [critics] sometimes miss the point that Unilever, Procter & Gamble, Nestlé and Coca-Cola are massive monoliths many times our size and making massive profits.’

The group would have larger sales than Tesco and more than twice those of Sainsbury’s.

He added: ‘It’s huge – a reflection of the way the world is changing. It’s likely to be long and drawn out, simply because the competition authorities will have a field day.’

Unilever said the offer of about £40 a share ‘fundamentally undervalues’ its business and that it ‘does not see the basis for any further discussions’. Chicago-based Kraft Heinz admitted there was no certainty of a deal but implied it would pursue the plan.