EXTRA: Unilever Rejects Kraft Heinz Approach For USD221 Billion Merger

LONDON (Alliance News) - Anglo-Dutch consumer goods giant Unilever PLC ...

Alliance News 17 February, 2017 | 8:42PM
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LONDON (Alliance News) - Anglo-Dutch consumer goods giant Unilever PLC has declined an approach made by US food company Kraft Heinz Co for a merger of the two companies, the US group said on Friday.

Kraft Heinz noted recent speculation about a possible combination of the two groups and confirmed it had made an approach to Unilever about merging.

While Kraft Heinz said Unilever had declined its advances, it intends to continue working with the UK-listed group on reaching a deal. It added there is no certainty a formal proposal will be tabled.

Kraft said combining the two groups will create a "leading consumer goods company with a mission of long-term growth and sustainable living".

Unilever has yet to release its own statement on the approach.

Unilever owns a wide range of food brands, including Hellman's mayonnaise, Knorr stock cubes and Ben & Jerry's ice cream, while Kraft Heinz owns Heinz ketchup, Kraft macaroni and Philadelphia spreads.

Shares in Unilever were up 14% at 3,827.31 pence on Friday, giving it a total group market capitalisation, including its Dutch arm, of USD114.16 billion.

Kraft Heinz has a market capitalisation of USD106.58 billion, so a combination of the two companies would create a group with a combined market capitalisation of around USD220.74 billion, or GBP177.66 billion.

The size of the two companies would likely mean the deal would face significant regulatory hurdles from competition authorities.

Kraft Heinz counts famous US investor Warren Buffet and Brazilian investment firm 3G Capital amongst its investors. 3G also owns a stake in Anheuser-Busch InBev NV, the brewing giant which last year created a GBP280.0 billion drinks giant when it merged with London-listed SABMiller.

By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland and Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance

Copyright 2017 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar Rating
Unilever PLC 4,007.50 GBX -0.17 -
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