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Unilever rejected Kraft Heinz takeover bid

Unilever rejected Kraft Heinz takeover bidBritish-Dutch multinational company Unilever has turned down a takeover offer from U.S. food giant Kraft Heinz, according to Bloomberg on Friday.

Kraft Heinz made a $143 billion offer for Unilever, attempting the largest-ever takeover in the food or beverage industry to create a consumer-goods giant.

But Unilever said on Friday it rejected the $50 a share proposal, comprising about two-thirds in cash and a third in new stock. The approach “fundamentally undervalues” the company, Unilever said, adding that it doesn’t see a basis for further discussions. Kraft Heinz said earlier it would seek to gain an agreement on the terms of a transaction.

3G Capital, the private-equity firm that runs Kraft Heinz, is under pressure to either do another major deal or show the company can boost sales.

Putting together Kraft Heinz and Unilever would create a company with combined sales of $84.8 billion last year. That would have ranked second among food and beverage companies, trailing Nestle SA’s $91.2 billion, according to data compiled by Bloomberg.

Kraft Heinz is itself the product of a merger. The company was forged by a $55 billion combination orchestrated by Warren Buffett’s Berkshire Hathaway Inc. and 3G, which had teamed up two years earlier on a buyout of H.J. Heinz. There had been speculation that 3G would look to buy another food company and resume a cost-cutting cycle spearheaded by Chief Executive Officer Bernardo Hees. Mondelez International Inc., General Mills Inc. and Kellogg Co. have been mentioned as potential targets.

Kraft’s overture follows the worst annual performance of Unilever’s stock last year since the financial crisis in 2008. The shares fell 2.5 percent in the course of 2016, though European rival Nestle SA fared only marginally better, losing 2 percent in the same 12 months.
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