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Warren Buffett's Kraft Heinz rebuffed after approaching Unilever over £143bn takeover

The Telegraph logo The Telegraph 17/02/2017 By Ashley Armstrong, Retail Editor
Warren Buffett's Kraft Heinz rebuffed after approaching Unilever over £100bn-plus takeover

Unilever, the Anglo-Dutch consumer giant behind Dove soap, Flora margarine and Marmite, has rebuffed a £143bn plus takeover approach from US rival Kraft Heinz.

In what would be the biggest ever takeover of a British company, Unilever said that it had been offered a deal which would mean its shareholders would have received $50 per share in a mix of $30.23 in cash and 0.22 shares in the enlarged business.

Unilever urged its shareholders to take no action and said that Kraft Heinz must either make a firm bid or walk away by 17 March under the UK takeover code.

A potential combination would create a company with €78.7bn (£67.4bn) in revenues and unite the world's biggest brands and create a global giant in household goods with the rights to Heinz baked beans and Philadelphia cheese.


Unilever's shares soared by more than 11pc following confirmation of the takeover approach on Friday. In midday trading the company's shares were up 376.5p to £37.25, valuing Unilever at £112.7bn.

In a statement to the London Stock Exchange, Kraft Heinz said that it had confirmed that it had "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."

Kraft and Heinz combined in a deal in 2015 Kraft and Heinz combined in a deal in 2015. Lazard is advising Kraft Heinz while Unilever is using a roster of advisers from Centerview, Morgan Stanley, UBS and Deutsche Bank.

Kraft Heinz, which was in fact another $100bn takeover orchestrated by Brazil's private equity titans 3G Capital and billionaire Warren Buffett's Berkshire Hathaway investment vehicle. In 2013, the Sage of Omaha teamed up with 3G to take the tomato ketchup maker in a $28bn deal. The takeover approach comes a day after Kraft Heinz reported a slip in fourth-quarter sales and a commitment to ramp up its cost cutting efforts.

Last month Unilever warned of a "slow start" to the year after sales slipped as it battled volatile currencies and tough conditions in Latin America. In 2012, two years after the hostile £11.5bn takeover of Cadbury, Kraft engineered a demerger which saw a spin-off of its sweets and chocolate business into a new entity Mondelez.

Kraft continues to make its famous Mac N Cheese, Dairy Lea and Maxwell House coffee.

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