Kraft Heinz offers to buy Unilever in $143B deal

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USA food giant Kraft Heinz Co. said it remains hopeful it will buy Unilever, even after its offer was rejected Friday.

"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", Kraft said in a news release. If it were to happen, Unilever consumer staples like Dove soap, Hellmann's mayonnaise and Lipton tea would join forces with Kraft Heinz's Oscar Mayer meats Heinz Ketchup and Kraft Macaroni & Cheese. "Kraft Heinz are attempting a massive push on the Fast Forward button...to acquire the sheer scale of brands that Unilever represents through one-off acquisitions could take decades".

"If I was Unilever, I would fight this with hand and fist", said branding expert Erich Joachimsthaler, who runs Vivaldi consulting firm.

But Kraft Heinz isn't giving up, setting the stage for what could potentially be one of the biggest deals ever in the space. That values the food giant at US$117.6 billion.

Kraft Heinz was born three years later after Kraft Foods became the subject of 45 billion U.S. dollar (£36.2 billion) takeover by HJ Heinz Co, owned by USA business magnate Warren Buffett's Berkshire Hathaway and Brazilian investment firm 3G Capital.

Unilever's London-listed shares jumped 13.2 percent, hitting a record high and posting their best day in 30 years, and the broader household and personal goods sector rose 2.8 percent to a new high.

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This relentless focus on costs, however, may end up making Kraft's pursuit of Unilever more hard. The company rejected the offer, saying it was too low.

Results also drove share prices, with Essentra PLC the top STOXX 600 gainer, up about 15 percent after reporting earnings.

Though the bid of $50 per share was publicly rejected by Unilever on Friday, Kraft said it was still in pursuit of a deal.

Unilever also could try to find a white-knight suitor that it sees as more compatible, according to Stifel Financial Corp. analyst Mark Astrachan.

"Kraft Heinz's approach demonstrates the pressure on brand owners to consolidate in the face of global pressure on margins", said Paul Hickman, an analyst at Edison Investment Research. Kraft Heinz itself was forged in a $55 billion combination orchestrated by 3G and Berkshire Hathaway, which is run by Warren Buffett.

It has until March 17 to make a final bid for Unilever under United Kingdom takeover rules.

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