Kraft Heinz, the American food and beverage company, made a $143 billion offer to Unilever in an acquisition bid that was spurned by the British-Dutch FMCG company. The merger, which is still on from Kraft's side, could be the "biggest deal in recent memory," according to CB Insights. There is a view that the track record of buyout firm 3G Capital, one of Kraft's investors, could have hit the deal.

On its part, Unilever perceived that the offer "fundamentally undervalues" the company.

"Their proposal represents a premium of 18 percent to Unilever's share price as at the close of business on February 16, 2017. This fundamentally undervalues Unilever. Unilever rejected the proposal as it sees no merit, either financial or strategic, for Unilever's shareholders," it said in a statement.

Here is a quick update about Kraft Heinz, which claims to be the fifth-largest food and beverage company in the world:

Brazilian private equity firm 3G Capital and Warren Buffett's Berkshire Hathaway hold 23.9 percent and 26.7 percent, respectively in Nasdaq-listed Kraft Heinz (KHC). Alexandre Behring, chairman of Kraft Heinz, is a co-founder of 3G Capital. Warren Buffett is one of the directors at KHC.

3G Capital counts Gisele Bundchen and tennis player Roger Federer as investors, who participated in a $10 billion fund-raising round last November, according to a Brazilian blog.

3G Capital has an aggressive approach to cutting costs and this could have affected the takeover bid and scuttle future proposals as well. "(The rebuff of Kraft) makes us also wonder if Unilever's focus on sustainability might make it very resistant to any further approach from Kraft," Reuters quoted Royal Bank of Canada analyst David Palmer as saying.

Kraft Heinz reported 3.7 percent fall in global sales to $6.85 billion in Q4 ended December 31, 2016. Net income attributable to shareholders rose to $944 million in Q4 from $285 million in the corresponding period last year.

During calendar year 2016, the company's sales stood at $26.48 billion, up from $18.33 billion in the previous calendar year, according to its financial statements released recently.

The stock price of KHC rose 10.7 percent on Friday to close at $96.65 on Nasdaq.

Kraft Heinz is the outcome of the merger in 2015 of Kraft and HJ Heinz in a $49 billion deal.</s>NEW YORK: US stocks edged to fresh records on Friday (Feb 17), shrugging off early weakness as news that Kraft Heinz plans to seek a takeover of Unilever sent shares of both companies surging.

All three major indices again ended at all-time highs, albeit very narrowly in the case of the Dow and S&P 500.

The Dow and S&P 500 spent much of the day in negative territory, with analysts pointing to profit-taking and the need for the market to digest earlier gains.

But a late surge lifted them into positive territory, amid merger speculation in multiple sectors.

The Dow Jones Industrial Average finished barely higher than the record close on Thursday to end the day at 20,624.05, up 4.28 points (0.02 per cent).

The broad-based S&P 500 added 3.94 points (0.17 per cent) at 2,351.16, while the tech-rich Nasdaq Composite Index rose 23.68 points (0.41 per cent) to 5,838.58.

Kraft Heinz jumped 10.7 per cent while Unilever surged 14.0 per cent after Unilever rejected a bid worth about US$143 billion. However, Kraft Heinz signalled it would still pursue a deal.

Other consumer products stocks also rose on speculation the Kraft Heinz talks could spur other deals. Colgate Palmolive gained 4.3 per cent, Kimberly Clark 4.1 per cent, and Clorox 2.8 per cent.

T-Mobile advanced 5.5 per cent and Sprint rose 3.4 per cent following a report that Sprint parent SoftBank planned to approach T-Mobile about a merger of the two wireless carriers.

United Health Group fell 3.7 per cent on reports that the Justice Department joined a whistleblower lawsuit alleging the company overcharged Medicare hundreds of millions of dollars.

Boeing gained 1.1 per cent following a visit by Trump to a South Carolina plant to commemorate the unveiling of its latest 787 "Dreamliner" plane.</s>NEW YORK — Kraft Heinz is attempting to buy Unilever in a $143 billion deal that would join the U.S. maker of cheeses and lunch meats with the European producer of mayo, teas and seasonings in a global powerhouse.

Unilever rejected the approach and called the price too low, while Kraft Heinz says it's still interested in a deal. Shares of both companies surged to new highs as investors saw prospects for cost cutting.

A combination of Kraft Heinz, which sells Oscar Mayer meats, Jell-O pudding and Velveeta cheese, and Unilever, which owns brands including Hellmann's, Lipton and Knorr, would rival Nestle as the world's biggest packaged food maker by sales.

That might not lead to big changes that customers would notice on shelves. But it's people's changing tastes, shifting away from boxed and canned groceries in favor of items that seem fresher or healthier, that's driving deal-making in the food industry.

Companies like Kraft Heinz, itself formed from two century-old businesses in 2015, are trying to find new avenues for growth amid heightened competition.

Part of the challenge is the proliferation of smaller foodmakers marketing more wholesome products, which makes it harder for the established companies to drive up sales simply by selling more of their well-known products or by raising prices, as they have in the past.

"That obviously has its limits," said David Garfield, head of the consumer products unit at consulting firm AlixPartners.

Instead, companies are being forced to dig deeper to find cost efficiencies or tap into new markets, Garfield said. That can include mergers that result in consolidated manufacturing systems or give companies access to distribution networks in regions of the world where they don't have a big presence.

Those were some of the factors that drove Oreo maker Mondelez International — which was split from Kraft in 2012 — to make an unsuccessful takeover bid for Hershey last year before retreating. And they were among the reasons cited by executives in the Kraft Heinz merger, which was engineered by Warren Buffett's Berkshire Hathaway and 3G Capital, the Brazilian investment firm with a history of taking over companies and aggressively cutting costs.

Bernardo Hees, a 3G partner, has slashed jobs and pursued other savings, some of them granular, as CEO of Kraft Heinz. In a 2015 memo to employees, Hees reminded them to print on both sides of the paper, reuse office supplies like binders and turn off computers before leaving the office to cut down on energy costs.

The company also stopped stocking the corporate office with free Kraft snacks.

Unilever follows Nestle, PepsiCo and Mondelez as the world's biggest packaged-food maker by retail sales, ahead of Kraft Heinz, according to Euromonitor International. In addition to its food products, it sells health and beauty products such as Axe body spray and Dove soap.

In the meantime, food and drinks companies like Coca-Cola Co., General Mills Inc. and Kellogg Co. are also under pressure from Wall Street to slash costs and find products that suit the shifting customer preferences.

While mega-deals are tough to pull off, they've made an array of acquisitions of smaller, faster-growing brands. Campbell Soup is trying to shed its canned-food image, and has bought juice and bagged carrots maker Bolthouse. General Mills now owns Annie's, Hormel owns Applegate meats and Justin's nut butters, and Dr Pepper recently bought Bai Brands, a maker of drinks sold as rich in antioxidants.</s>Sign up for one of our email newsletters.

NEW YORK — Kraft Heinz is attempting to buy Unilever in a $143 billion deal that would join the U.S. maker of cheeses and lunch meats with the European producer of mayo, teas and seasonings in a global powerhouse.

Unilever rejected the approach and called the price too low, while Kraft Heinz says it's still interested in a deal. The shares of both companies surged to new highs as investors saw prospects for cost cutting.

A combination of Kraft Heinz, which sells Oscar Mayer meats, Jell-O pudding and Velveeta cheese, and Unilever, which owns brands including Hellmann's, Lipton and Knorr, would rival Nestle as the world's biggest packaged food maker by sales.

That might not lead to big changes that customers would notice on the supermarket shelves.

But people's changing tastes, shifting away from boxed and canned groceries in favor of items seem fresher or healthier, that are driving deal-making in the food industry.

Companies like Kraft Heinz, itself formed from two century-old businesses in 2015, are trying to find new avenues for growth amid heightened competition.

Part of the challenge is the proliferation of smaller food makers marketing more wholesome products, which makes it harder for the established companies to drive up sales simply by selling more of their well-known products or by raising prices, as they have in the past.

“That obviously has its limits,” said David Garfield, head of the consumer products unit at consulting firm AlixPartners.

Instead, companies are being forced to dig deeper to find cost efficiencies or tap into new markets, Garfield said. That can include mergers that result in consolidated manufacturing systems or that give companies access to distribution networks in regions of the world where they don't have a big presence.

Those were some of the factors that drove Oreo and Chips Ahoy maker Mondelez International — which was split from Kraft in 2012 — to make an unsuccessful takeover bid for Hershey last year before retreating.

And they were among the reasons cited by executives in the Kraft Heinz tie up, which was engineered by Warren Buffett's Berkshire Hathaway and 3G Capital, the Brazilian investment firm with a history of taking over companies and aggressively cutting costs.

Unilever follows Nestle, PepsiCo and Mondelez as the world's biggest packaged food maker by retail sales, coming in ahead of Kraft Heinz, according to Euromonitor International.

In addition to its food products, it sells health and beauty products such as Axe body spray and Dove soap.

Shares of Kraft Heinz closed up nearly 11 percent Friday. Unilever PLC jumped 14 percent.</s>NEW YORK — Kraft Heinz is attempting to buy Unilever in a $143 billion deal that would create a global food leader that sells products including cheese, lunch meats, spreads and snacks.

U.S. food giant Kraft Heinz Co. says its offer to buy Europe’s Unilever was rejected, but it’s still pursuing the deal.

The maker of Oscar Mayer meats, Jell-O pudding and Velveeta cheese said, though, there’s no certainty that it will make another offer for Unilever, which owns brands including Hellmann’s, Lipton and Knorr. Unilever said Kraft’s offer is too low, and that it sees no reason to continue talks with Kraft.

The shares of both companies surged to new highs early in trading.

The deals underway in the packaged food industry are a symptom of the strains being felt by its major players. Companies like Kraft Heinz, two century-old companies that became one in 2015, are trying to fatten profits even as sales growth weakens.

Last year Mondelez, which makes Oreo and Chips Ahoy, retreated from its attempt to take over Hershey.

The tie-up between Kraft and Heinz was engineered by Warren Buffett’s Berkshire Hathaway and Brazilian investment firm 3G Capital, which has a history of taking over companies and aggressively cutting costs.

Executives pitched the deal as the path to enormous savings because the companies would be able to utilize the same manufacturing and distribution networks.

Bernardo Hees, the CEO of Kraft Heinz and a 3G partner, has made job cuts and is pursuing other savings, some of them granular. In a memo sent to employees in the summer of 2015, Hees reminded them to print on both sides of the paper, reuse office supplies like binders and to turn off computers before leaving the office to cut down on energy costs.

The company also stopped stocking the corporate office with free Kraft snacks.

Coca-Cola Co., General Mills Inc., Kellogg Co. and PepsiCo Inc., under pressure from Wall Street, have all slashed costs and are trying to find products that suit the fickle and shifting preferences of customers.

They’ve done that through an array of acquisitions of smaller, faster growing brands. Campbell Soup is trying to shed its canned-food image. It bought juice and bagged carrots maker Bolthouse. General Mills now owns Annie’s, Hormel owns Applegate meats and Justin’s nut butters, and Dr. Pepper recently bought Bai Brands, a maker of drinks sold as rich in antioxidants. But megadeals are harder to pull off.

Shares of Kraft Heinz rose 8 per cent Friday. Unilever PLC jumped almost 12 per cent.</s>U.S. food company Kraft Heinz Co made a surprise $143 billion offer for Unilever Plc in a bid to build a global consumer goods giant, although it was flatly rejected on Friday by the maker of Lipton tea and Dove soap. A combination would be the third-biggest takeover in history and the largest acquisition of a UK-based company, according to Thomson Reuters data.

Start the conversation, or Read more at Reuters.</s>Kraft Heinz has reported better-than-expected profits for its fiscal fourth quarter, helped by lower costs.

For the three months to 31 December, net profit jumped up 46.4% to $944m, while operating profit was up 22%, although sales were down a less-than-expected 3.8% to $6.9bn (+1.6% organic basis).

At its US business, sales were up 1.7% to $4.8bn on an organic basis, helped by increased prices and volumes. Sales in Canada were up 1.2% on the same basis to $617m, but Europe recorded a 1.5% dip to $600m, hurt by weakness in the UK. Finally, the Rest of the World unit saw organic sales grow by 4.5% to $801m.

The group – the world’s fifth-largest food & beverage maker – said it is now aiming at reducing costs by $1.7bn annually by 2018, up from its earlier target of $1.5bn.

CEO Bernardo Hees noted: “Looking forward, our objectives and opportunities are clear. But we need to sharpen our focus on profitable sales, and further improve our capabilities and execution to deliver another year of strong, sustainable growth in 2017.”

Hees also said the group will deliver further innovation in several areas this year, without offering specific details. He added that the group has identified the Heinz, Kraft, and Planters brands as key for future growth, but also sees opportunities in segments such as condiments and sauces, cheese, meals, nuts and baby food.</s>About 40 percent of the job cuts come from the company realigning its U.S. sales division, Kraft said. About 20 percent of the jobs being cut in the United States and Canada are currently open positions, the company said. The planned job cuts do not include any cuts at manufacturing facilities.

The 1,600 job cuts represent about 1.26 percent of the company's total workforce. Kraft has about 127,000 employees, including about 46,500 in North America.

Kraft also said its 2011 net revenue would be up by about 10 percent, as it ended the year with strong momentum around the world despite a tough operating environment.

It expects to report 2011 operating earnings per share of at least $2.28, including a penny per share hit from currency in the fourth quarter. Previously Kraft had forecast operating earnings per share of at least $2.27, excluding any potential currency impact in the fourth quarter.

Analysts, on average, had expected Kraft to earn $2.27 per share this year, according to Thomson Reuters I/B/E/S.

Kraft's 2011 organic net revenue -- or revenue excluding the impact of acquisitions, divestitures, currency and accounting calendar changes -- should be up about 6.5 percent, versus its prior outlook at least 6 percent. The growth was driven by mid-single-digit percentage growth in North America and Europe, and double-digit percentage growth in developing markets, the company said.

Shares of Kraft climbed 1.7 percent to $38.42 in afternoon trading on the New York Stock Exchange, hitting their highest level since early 2003.

Kraft, the largest North American packaged food company, announced plans to break up back in August.

The snacks business, with annual sales of $32 billion, operates in high-growth emerging markets with products like Oreo and Lu cookies, Cadbury chocolates and Trident gum. The North American grocery business, with annual sales of $16 billion, is focused in more mature markets with products like Kraft and Velveeta cheeses, Maxwell House coffee and Capri Sun drinks.

Once the North American grocery business is spun off it will cut its number of U.S. management centre locations from four to two. Beverages, currently in Tarrytown, New York, and Planters, currently in East Hanover, N.J., will move to the Chicago area by December. Most employees affected by those moves will have the option to transfer, Kraft said. Also, Kraft will close its Glenview, Illinois, management centre by the end of 2013.

The future global snacks company will also be based in the Chicago area, while its North American unit will be based in East Hanover.

Kraft, which is based near Chicago in Northfield, Illinois, said it is still reviewing its manufacturing facilities to consider what will be best for the two companies.

Kraft said its snacks business will deliver products directly to stores, with most U.S. retail sales employees moving over to the North American region of the global snacks company.

The grocery company will use warehouse distribution, with local retail support contracted out to two companies. Acosta Sales & Marketing will become its partner in grocery stores and mass retail channels and Crossmark will continue to support Kraft in convenience stores.

The company plans to report its full 2011 results and give outlook on February 21.</s>Kraft Heinz is itself the product of a merger. The company was forged by a $55 billion combination orchestrated by Warren Buffett’s Berkshire Hathaway Inc. and 3G, which had teamed up two years earlier on a buyout of H.J. Heinz. There had been speculation that 3G would look to buy another food company and resume a cost-cutting cycle spearheaded by Chief Executive Officer Bernardo Hees. Mondelez International Inc., General Mills Inc. and Kellogg Co. have been mentioned as potential targets.</s>NEW YORK — Kraft Heinz is attempting to buy Unilever in a $143 billion deal that would join the U.S. maker of cheeses and lunch meats with the European producer of mayo, teas and seasonings in a global powerhouse.

Unilever rejected the approach and called the price too low, while Kraft Heinz says it’s still interested in a deal. The shares of both companies surged to new highs as investors saw prospects for cost-cutting.

A combination of Kraft Heinz, which sells Oscar Mayer meats, Jell-O pudding and Velveeta cheese, and Unilever, which owns brands including Hellmann’s, Lipton and Knorr, would rival Nestle as the world’s biggest packaged food maker by sales.

That might not lead to noticeable changes on the supermarket shelves. But people’s changing tastes, away from boxed and canned groceries in favor of items that seem fresher or healthier, drive deal-making in the food industry.

Companies like Kraft Heinz, itself formed from two century-old businesses in 2015, are trying to find new avenues for growth amid heightened competition.

Part of the challenge is the proliferation of smaller food makers marketing more wholesome products, which leaves less room for the established companies to drive up sales simply by selling more of their well-known products — or by raising prices, as they have in the past.

“That obviously has its limits,” said David Garfield, head of the consumer products unit at consulting firm AlixPartners.

Instead, companies are digging deeper to find cost efficiencies or tap new markets, Garfield said. That can include mergers to consolidate manufacturing systems, or to give access to distribution networks in regions of the world where a company doesn’t have a big presence.

Those were some of the factors that drove Oreo and Chips Ahoy maker Mondelez International — which was split from Kraft in 2012 — to make a takeover bid for Hershey last year before retreating. And they were among the reasons cited by executives in the Kraft Heinz tie-up, which was engineered by Warren Buffett’s Berkshire Hathaway and 3G Capital, the Brazilian investment firm with a history of taking over companies and aggressively cutting costs.

Bernardo Hees, a 3G partner, has slashed jobs and pursued other savings, some of them granular, as CEO of Kraft Heinz. In a 2015 memo to employees, Hees reminded them to print on both sides of the paper, reuse office supplies like binders and turn off computers before leaving the office to cut down on energy costs.

The company also stopped stocking the corporate office with free Kraft snacks.

Unilever is the world’s fourth-biggest maker of packaged food by retail sales, after Nestle, PepsiCo and Mondelez, and ahead of Kraft Heinz, according to Euromonitor International. In addition to food, it sells health and beauty products such as Axe body spray and Dove soap.

In the meantime, food and drinks companies like Coca-Cola Co., General Mills Inc. and Kellogg Co. are also under Wall Street pressure to slash costs and align with shifting customer preferences.

While mega-deals are rare, they’ve made an array of acquisitions of smaller, faster-growing brands. Campbell Soup is trying to shed its canned-food image, and has bought juice and bagged carrots maker Bolthouse. General Mills now owns Annie’s, Hormel owns Applegate meats and Justin’s nut butters, and Dr Pepper recently bought Bai Brands, a maker of drinks sold as rich in antioxidants.
Kraft Heinz drops its bid to buy Unilever for US$143 billion. Unilever rejected the idea last Friday but Kraft Heinz still expressed interest in finding an agreement.