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Kraft Heinz to pursue merger despite Unilever rejection

By Reuters

Published: 07:59 EST, 17 February 2017 | Updated: 07:59 EST, 17 February 2017

By Martinne Geller

LONDON, Feb 17 (Reuters) - U.S. food company Kraft Heinz Co has proposed a merger with $125 billion Unilever in what would be one of the biggest deals ever, but the Anglo-Dutch consumer goods company has declined, Kraft said on Friday.

A deal with Unilever, which had a market value of $125 billion before its shares spiked, would add Hellmann's mayonnaise, Ben & Jerry's ice cream and Knorr soups to a portfolio that includes Heinz ketchup and Kraft Macaroni and Cheese.

"Kraft confirms that it has made a comprehensive proposal to Unilever about combining the two groups to create a leading consumer goods company with a mission of long-term growth and sustainable living," Kraft said in a statement.

"While Unilever has declined the proposal, we look forward to working to reach agreement on the terms of a transaction."

Unilever spokeswomen did not immediately reply to requests for comment.

Kraft said a further statement would be made as appropriate.

Unilever shares jumped as much as 14 percent to a record high. They were up 11 percent at 37.37 pounds at 1220 GMT.

This is below the 40 pound-per-share price mentioned by the FT Alphaville blog, which first reported rumours of the approach.

Kraft Heinz, controlled by private equity firm 3G Capital, has been widely expected to do a deal this year, given earlier reports that 3G's Brazilian principals were raising a new fund. ($1 = 0.8051 pounds) (Reporting by Martinne Geller; editing by Keith Weir/Ruth Pitchford)

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Larry Whyte
Larry Whyte

He is a leading authority on business trends including ‘big data’, self-employment and the social media revolution. He’s the author of the award-winning book, Marketing Shortcuts for the Self-Employed (2011, Wiley) and a regular speaker for Bloomberg TV. He has spoken about global mega trends, big data and the social media revolution at conferences and business events around the world .

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