(KHC), has withdrawn its $143 billion bid to buy United Kingdom -based Unilever (UL) in a deal that would have formed the world's largest consumer goods company, with an estimated value north of $200 billion.
"It was always going to be a hard pitch to convince shareholders to relinquish their grip on Unilever, given the expectations for the company to keep churning out resilient growth in the years to come", George Salmon, Equity Analyst at Hargreaves Lansdown, said.Kraft's decision to pull the deal also removes a political headache for Prime Minister May who has been adamant that Britain should vet foreign takeovers.
"Unilever and Kraft Heinz hereby announce that Kraft Heinz has amicably agreed to withdraw its proposal for a combination of the two companies", the statement said.
Henderson Group Plc's John Bennett, who oversees more than $12 billion, is betting that a failed bid for Unilever may lead the owner of brands like Ben & Jerry's ice cream and Dove soap to consider selling some of its assets. While the US food company said Friday it would continue talks with Unilever, its takeover bid was withdrawn on Monday, The New York Times reported.
The deal being made public knowledge so early on was a deal breaker for Kraft Heinz. Kraft Heinz, on the other hand, was in the mood to pursue a deal till Sunday afternoon.
"Kraft Heinz's interest was made public at an extremely early stage", spokesman Michael Mullen said.
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The deal proposed by the American maker of Heinz ketchup and Philadelphia cheese would have brought together some of the world's best-known brands.
People familiar with the talks at the weekend said 3G and Berkshire decided Unilever's negative response made a friendly transaction impossible, Bloomberg reported.
Kraft Heinz's bid for Unilever is likely to revive speculation the group could be interested in acquiring Mondelez International, the snack company that was split out of Kraft Foods in 2012.
"It became clear [to Kraft Heinz] that there was very little chance the deal would ever happen", the source said.
Stocks in London edged higher in early trade, tracking a positive session in Asia, but volumes were expected to be a little lighter than usual with USA markets set to be remain closed for Presidents Day.
The company's stock plummeted, even though most of the European indices opened on a bullish note, due to Kraft Heinz's most recent announcement stating that the company is withdrawing their initial acquisition proposal for Unilever, which was rejected by the latter right away upon the proposal's announcement.