Kraft Heinz Drops $143 Billion Takeover Bid For Unilever
Kraft Heinz Company has decided against proceeding with its takeover of Unilever after an initial offer of a mix of cash and shares, valuing Unilever at $143 billion (£115 billion), was rejected. The proposal represented a premium of 18% to Unilever’s share price as at the close of business on 16 February 2017. According to Unilever, this fundamentally undervalued the business. Kraft Heinz has subsequently amicably agreed to withdraw its proposal for a combination of the two companies.
Kraft Heinz Company is the fifth-largest food and beverage company in the world with a portfolio of iconic brands including Kraft, Heinz, ABC, Capri Sun, Classico, Jell-O, Kool-Aid, Lunchables, Maxwell House, Ore-Ida, Oscar Mayer, Philadelphia, Planters, Plasmon, Quero, Weight Watchers Smart Ones and Velveeta.
With a turnover of €52.7 billion in 2016 and employing 168,000 people, Unilever operates across four categories – Personal Care, Home Care, Foods and Refreshment. 57% of its business is in emerging markets and it has 13 brands with sales of more than €1 billion a year.
A combination of Kraft Heinz and Unilever would have created the world’s second largest consumer goods group by sales after Nestlé and represented the third-biggest takeover in history.
Kraft Heinz is 50% owned by veteran investor Warren Buffett’s Berkshire Hathaway and 3G Capital, the private equity firm. In the recent past, 3G Capital was involved in Anheuser-Busch InBev’s acquisition of SABMiller and the merger of Kraft and Heinz.
