Kraft Heinz withdraws bid for Unilever

The US food giant Kraft Heinz has dropped its bid to buy Unilever days after it rejected a $143 billion buyout offer, the companies said on Sunday.

Kraft Heinz had signaled on Friday that it would press ahead with its campaign after the British-Dutch consumer products manufacturer said the initial proposal "fundamentally undervalues" its worth.

However, strong resistance from Unilever reportedly persuaded Kraft Heinz over the weekend to back out.

"Unilever and Kraft Heinz hereby announce that Kraft Heinz has amicably agreed to withdraw its proposal for a combination of the two companies," they announced in a joint statement.

"Unilever and Kraft Heinz hold each other in high regard," it added. "Kraft Heinz has the utmost respect for the culture, strategy and leadership of Unilever."

The deal would have created a giant in global food -- second only to Nestle -- joining the maker of Kraft cheese and Heinz ketchup to its European counterpart, whose products include Q-tips, Hellmann's mayonnaise and Ben & Jerry's ice cream.

Analysts had said the potentially massive merger -- which would have been one of the largest corporate deals in history -- could have raised red flags for antitrust regulators over the effect on consumers, and for politicians given the possibly large job cuts.

Kraft's pursuit of Unilever came as global food companies struggle with anemic economic growth in many key markets.

Kraft Heinz is the fifth-biggest food and beverage company in the world and the third-biggest in North America. It was formed by the 2015 merger struck between Heinz's controlling shareholders, US billionaire Warren Buffet's Berkshire Hathaway, and 3G Capital of Brazil.

Source: AFP