Unilever, a British consumer goods company, is exploring alternative methods for expansion after Kraft Heinz withdrew their $143 billion takeover bid in February. The takeover would have created an industry stalwart and giant within the packaged food and consumer goods realm. The original offer intended to pay shareholders $50 a share in a cash-stock combination.
A Kraft Heinz-Unilever merger would combine the fifth- and third-largest consumer food firms, combining industry giants like Ben & Jerry’s with Heinz ketchup and the classic Kraft Macaroni & Cheese.
However, the board of Kraft Heinz (a board that includes some of the world’s most prominent billionaires like Warren Buffett) decided to rescind its offer 48 hours after Unilever rejected the billion-dollar offer. Unilever said that the offer, which was a roughly 18% premium on the company’s stock price at the time, was too low and declined to negotiate. Ultimately, Kraft Heinz was wary to engage in a lengthy fight for Unilever despite the potential benefits of the mega-merger.
After the withdrawal, Unilever sent out a press release regarding its hope to conduct a comprehensive review of options “available to accelerate delivery of value for the benefit” of their shareholders. Additionally, stocks for both companies shot up the Friday of the announcement with Unilever stock rising 3% in London and Amsterdam. Unfortunately, that next Monday stocks for Unilever dropped sharply.
Had the merger been completed, it would have been the largest since Vodaphone’s $183B merger with Mannesmann in 2000.
Unilever Heads Back to the Drawing Board after Takeover Bid is Withdrawn (PDF)