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Kraft Heinz Wanted Unilever, But Alas...

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Kraft Heinz Wanted Unilever, But Alas...
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Shares of Unilever plc (ADR) (NYSE: UL), the British-based conglomerate with exposure in food, home and personal care products, soared higher by more than 10 percent early Friday morning after the company was named as an acquisition target.

According to the Financial Times, the American giant Kraft Heinz Co (NASDAQ: KHC) confirmed it has offered to acquire Unilever for £112 billion, or roughly $139 billion.

Related Link: Could Kraft Heinz Deliver Double-Digit Earnings Growth This Year?

The Financial Times noted that American food giant said it "has made a comprehensive proposal to Unilever about combining the two groups to create a leading consumer goods company with a mission of long-term growth and sustainable living."

The Financial Times added that Unilever declined the proposal, but Kraft Heinz is willing to work with Unilever to reach an agreement.

The Post Script

However, following the Financial Times report, Reuters reported the offer was rejected by Unilever. Unilever issued a response to the possible deal in which it said the offer "fundamentally undervalues" the company.

Kraft Heinz said in a statement: "Kraft confirms that it has made a comprehensive proposal to Unilever about combining the two groups to create a leading consumer goods company with a mission of long-term growth and sustainable living [...] While Unilever has declined the proposal, we look forward to working to reach agreement on the terms of a transaction."

This was met with Unilever saying it is rejecting the offer as it "sees no merit, either financial or strategic, for co. shareholders" and does not see any basis for further discussions with Kraft Heinz.

Coincidence or not, news of the acquisition offer followed Kraft Heinz's worst trading day since the 2015 merger which brought together Kraft and Heinz with the help of Brazil-based 3G Capital and billionaire investor Warren Buffett.

Shares of Kraft Heinz lost more than 4 percent on Thursday to close the day at $87.28 but jumped more than 5 percent Friday morning after details of the deal were announced.

Unilever shares were up 10.59 percent at $47.08 at last check in Friday's pre-market session.

Posted-In: 3G Capital Financial Times Kraft Kraft HeinzNews M&A Movers Trading Ideas Best of Benzinga

 

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