Unilever rejects merger offer from Kraft Heinz
Unilever shares surge as much as 14 per cent in London and 11 per cent in Amsterdam
Shares in Unilever, which makes Dove soap and deodorant among other products, grew rapidly. Photograph: Bloomberg
Kraft Heinz said it made an approach to Unilever about combining the companies, a deal that would create a consumer-goods giant with brands spanning Dove soap to Heinz ketchup.
Unilever rejected the approach, Kraft Heinz said Friday in a statement issued in response to speculation that it had made a bid.
The Pittsburgh-based company said it made a “comprehensive proposal” and will seek to gain an agreement on the terms of a transaction.
Unilever shares surged as much as 15 per cent to a record in London, valuing the maker of Hellmann’s mayonnaise at more than £113 billion.
The stock gained as much as 12 per cent in Amsterdam, while Kraft Heinz gained about 4.7 per cent in premarket trading in New York.
“There can be no certainty that any further formal proposal will be made to the board of Unilever or that an offer will be made at all or as to the terms of any transaction,” said the US maker of Velveeta cheese.
A deal would mark a major step-up in industry consolidation following this week’s $16.6 billion agreed offer for baby-formula maker Mead Johnson Nutrition Co. by Reckitt Benckiser Group.
Consumer-goods makers need to find new avenues for growth as conditions become tougher across the globe.
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.