Mike Mozart
Previously, Kraft unexpectedly proposed Unilever to create a global consumer market giant, but Unilever, producer of Lipton tea and Dove soap, rejected it last Friday. Kraft then has withdrawn its proposal, explaining that it would be too difficult to agree on the deal after its details became public so quickly, told Reuters sources familiar with the situation.
One source noted that Kraft did not expect such resistance from Unilever. One of the main concerns during negotiations were the question of approval by the UK authorities, as well as differences in the culture of companies and business models, the source added.
"Kraft Heinz’s keenness went public at an extremely early stage, - said, in turn, the company’s spokesman Michael Mullen. - Our goal was to continue the process on a friendly basis, but Unilever has made it clear that it would not seek to conclude the transaction. It is better to retreat so that the two companies could focus on their own plans to generate income. "
Kraft on Friday had to announce the offer under the United Kingdom’s rules in respect of acquisitions, after rumors of the potential merger spread among traders.
The absorption would be the third largest in the history and the largest acquisition for the UK-based company. Sales of the combined company would have amounted to $ 82 billion.
Earlier, The Financial Times pointed out that British Prime Minister Theresa May ordered senior officials to check whether the transaction does not represent a threat to British economic interests.
The failure of negotiations with Unilever sparked debate among analysts and investors about whether Kraft will try to acquire another large producer of consumer goods.
"We believe that this announcement is a reminder, if any, of Kraft’s interest, ability and commitment to seek to scale mergers and acquisitions in the short term", - said Barclays analyst Andrew Lazar.
Unilever stated that, in their view, the merger is not of their financial or strategic interest, but they still would like to reach an agreement.
Information about the possible deal pushed Unilever's share price up by 11%, to $ 46.24. The company’s capitalization at the same time reached $ 139 billion. Thus, if the merger did take place, it would become one of the largest in history.
Concern Kraft Heinz was formed by merger of Kraft Foods Group with H.J. Heinz Company, which was announced in March 2015. Heinz is owned by Warren Buffett’s holding Berkshire Hathaway and Brazilian investment fund 3G Capital.
Kraft Heinz’s headquarters are located in the US city of Chicago (Illinois) and Pittsburgh (Pennsylvania). The company is considered one of the largest producers of food products and beverages. Unilever is based in London and Rotterdam, and is also one of the largest food companies in the world.
source: reuters.com
One source noted that Kraft did not expect such resistance from Unilever. One of the main concerns during negotiations were the question of approval by the UK authorities, as well as differences in the culture of companies and business models, the source added.
"Kraft Heinz’s keenness went public at an extremely early stage, - said, in turn, the company’s spokesman Michael Mullen. - Our goal was to continue the process on a friendly basis, but Unilever has made it clear that it would not seek to conclude the transaction. It is better to retreat so that the two companies could focus on their own plans to generate income. "
Kraft on Friday had to announce the offer under the United Kingdom’s rules in respect of acquisitions, after rumors of the potential merger spread among traders.
The absorption would be the third largest in the history and the largest acquisition for the UK-based company. Sales of the combined company would have amounted to $ 82 billion.
Earlier, The Financial Times pointed out that British Prime Minister Theresa May ordered senior officials to check whether the transaction does not represent a threat to British economic interests.
The failure of negotiations with Unilever sparked debate among analysts and investors about whether Kraft will try to acquire another large producer of consumer goods.
"We believe that this announcement is a reminder, if any, of Kraft’s interest, ability and commitment to seek to scale mergers and acquisitions in the short term", - said Barclays analyst Andrew Lazar.
Unilever stated that, in their view, the merger is not of their financial or strategic interest, but they still would like to reach an agreement.
Information about the possible deal pushed Unilever's share price up by 11%, to $ 46.24. The company’s capitalization at the same time reached $ 139 billion. Thus, if the merger did take place, it would become one of the largest in history.
Concern Kraft Heinz was formed by merger of Kraft Foods Group with H.J. Heinz Company, which was announced in March 2015. Heinz is owned by Warren Buffett’s holding Berkshire Hathaway and Brazilian investment fund 3G Capital.
Kraft Heinz’s headquarters are located in the US city of Chicago (Illinois) and Pittsburgh (Pennsylvania). The company is considered one of the largest producers of food products and beverages. Unilever is based in London and Rotterdam, and is also one of the largest food companies in the world.
source: reuters.com