Pressure was last night mounting on Theresa May to make her opposition clear after the Anglo-Dutch firm rejected the bid from the US ketchup producer. The Prime Minister singled out Kraft’s 2010 takeover of Cadbury as an example of a deal that should have been blocked when she launched her leadership bid last year. After the Americans bought the iconic British chocolate company, they reneged on a promise to keep a local plant open.

Former business secretary Vince Cable, who worked alongside Mrs May until 2015, said she should act to stop overseas conglomerates trying to cash in on the post-Brexit fall in the pound. “This is an obvious case of a company being undervalued because of sterling’s devaluation since the referendum,” he said.

“Unilever is a very good company. There’s no question of under-performance or needing new management. The question is, what is the Government going to do? This is a very big test of her credibility.”

Former shadow business secretary Chuka Umunna said: “Sterling’s slump has left us in greater danger of losing control of some of Britain’s best and biggest companies to distant multi-national ownership.” Unilever employs 7,500 in the UK and estimates its products are in 98 per cent of the country’s households.

When Mrs May spoke about Kraft last year, she said takeovers should be judged on whether they benefited staff and customers, as well as investors, saying: “Transient shareholders, who are mostly companies investing other people’s money, are not the only people with an interest when firms are sold or close.” A spokesman for the Department for Business, Energy & Industrial Strategy said: “This is clearly an important potential deal for a major company in the UK and its workforce. We will continue to monitor the situation closely.”</s>The takeover bid by US giant Kraft Heinz has handed bosses at Marmite maker Unilever a £500,000 windfall on shares they picked up two days earlier.

Unilever chief executive Paul Polman was among 13 executives at the firm given shares worth £3.3m on Wednesday.

Yesterday, the company’s value soared 13 per cent as it was revealed ketchup maker Kraft Heinz had staged an audacious takeover bid.

It meant the board members of Unilever saw their shares climb by around £500,000. Polman, 60, who is renowned for his zany comments on the environment and business methods, made £150,000.

On top of this he saw his stake in the company worth an estimated £10.4m yesterday morning, soar by £1.5m.

The surprise £115bn bid by Kraft Heinz, which was rejected by Unilever, would have been the second-biggest takeover deal in history, behind the £147bn swoop on Germany’s Mannesmann by Vodafone in 2000.

Billionaire investor Warren Buffett was behind Kraft Heinz’s audacious £115bn swoop for European rival Unilever – and is ready to bankroll an even bigger offer. Buffett, 86, dubbed the Sage of Omaha for his ability to predict the markets, owns a 26.8pc stake in Kraft though his Berkshire Hathaway fund. A further 24.1pc is owned by controversial Brazilian private equity firm 3G, which in the past has been a close ally of Buffett (pictured above with actress Glenn Close at a summit in Washington). Buffett, who according to Forbes is the world’s second richest man worth around £68bn, built his stake in Kraft with 3G in 2015. The two had previously teamed up when 3G merged Burger King with doughnut chain Tim Hortons to create the firm Restaurant brands International. 3G also controls AB InBev, which last year merged with SAB Miller in a £69bn deal. Buffett has said he wanted to work with 3G on another takeover in the future. The veteran investor, who backed Hillary Clinton in the US elections last year, has shown no signs of wanting to step back from his firm. He recently said he could keep going until he was 100.

It could surpass this record with Kraft Heinz set to return to the bargaining table with a bigger bid, which must be by March 17 under US takeover rules.

The takeover would be a bumper payday for investment banks, stockbrokers, lawyers and other advisers.

Lazard has been appointed to broker a deal for Kraft, while Morgan Stanley and Centerview are acting for Unilever, along with corporate brokers UBS and Deutsche.

Kraft made an offer 18 per cent above the value of the shares on Thursday that would see Unilever shareholders receive £40 a share in a mix of cash and equity.

But the Anglo-Dutch company said the offer undervalued the firm, and added it had no merit.

Analysts predicted competition concerns, suggesting a deal might not get approval from regulators.

Michael Hewson, analyst at CMC Markets, said: ‘The amount of costs that could well get stripped out of any combined entity is bound to worry governments in countries where Unilever has a significant number of employees, like the UK and Holland. UK authorities have already had experience of broken promises by Kraft in the Cadbury takeover a few years ago.’

For Kraft, the deal would help it to achieve explosive growth almost overnight.

Steve Clayton, fund manager at Hargreaves Lansdown, said Unilever shareholders were in ‘no mood’ to accept a short-term premium in exchange for losing the growth the company could produce for decades to come.

‘To win over a majority of Unilever’s shareholders, we think Kraft Heinz will need to dig very deep indeed,’ he added.

Kraft Heinz said it wanted to create a leading consumer goods company with a mission of long-term growth and sustainable living. Kraft Heinz shares were up 7 per cent at $93.98 in New York.</s>LONDON (Reuters) - 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.

It would bring together some of the world’s best known brands, from toothpaste to ice creams, and combine Kraft’s strength in the United States with Unilever’s in Europe and Asia.

The global packaged food industry is grappling with slowing growth, new competition from upstart brands, deflation in developed markets and more health-conscious consumers.

Although Kraft, which is controlled by U.S. billionaire Warren Buffett and private equity firm 3G Capital, said it looked forward to talking terms, Unilever said it saw no reason to discuss a deal without financial or strategic merit.

Kraft approached Unilever earlier this week, according to people familiar with the matter, who declined to be identified because the approach was confidential.

Kraft believes that investing in innovation would be an important part of the combined company, one of the people said. Kraft has also offered to keep three headquarters for the combined company in the United States, Britain and the Netherlands, the source added.

Credit rating agency Moody’s characterized the bid for Unilever as “credit negative” as the combined company would be more highly financially leveraged. There would be offsetting benefits such as cost savings, an expanded geographic footprint and improved product diversification, the agency said.

Kraft wants the combined company’s credit rating to be investment-grade, according to the sources.

Kraft has until March 17 to make a final bid for Unilever under UK takeover rules.

Unilever shares rose to a record following news of the offer, which analysts at Jefferies called a “seismic shock”, and closed 15 percent higher, short of Kraft’s $50 per share offer price, with the news lifting shares across the sector.

Unilever said Kraft’s proposal included $30.23 per share in cash, payable in U.S. dollars, and 0.222 of a share in a new enlarged entity per Unilever share and represented an 18 percent premium to its share price on Thursday.

“We believe Kraft will likely need to raise its offer substantially if it hopes to change the outcome,” RBC Capital Markets analyst David Palmer said in a research note.

Kraft’s move could flush out other bidders for Unilever, but of the potential rivals, U.S. consumer giant Procter & Gamble Co may face anti-trust hurdles, while pharmaceutical and consumer packaged goods company Johnson and Johnson would likely not be interested in household products.

UNILEVER’S CHALLENGES

Unilever, which has struggled recently amid slowing growth and currency fluctuations, saw its shares tumble 4.5 percent on Jan. 26, its worst day in nearly a year, when the company reported lower-than-expected fourth-quarter sales. The share plunge encouraged Kraft to make an approach, another source familiar with the matter said, asking not to be named because the matter is confidential.

Unilever has been hit by a slowdown in emerging markets, which it and other consumer companies have long relied on for growth, as well as in its home market, where consumers have been rattled after “Brexit,” Britain’s decision to leave the European Union last year.

Brexit pushed down the value of the pound, raising the cost of producing consumer goods in Britain and straining relations between the country’s retailers and suppliers.

For Kraft, its move comes as low interest rates and cheap debt have fueled big cross-border deals, making it the busiest start to the year for M&A; activity on record.

Still, investors will look at Kraft-Heinz’s own track record of boosting sales when evaluating whether they can help Unilever cope with its own slowed growth. Kraft’s sales fell 3.8 percent to $6.86 billion in the fourth quarter ending Dec. 31, and its U.S. sales, which account for more than 70 percent of total sales, fell 3.1 percent to $4.84 billion.

Kraft Heinz shares rose more than 10 percent in New York trading, helping lift the Nasdaq to a record high.

3G READY TO DEAL

Although Kraft is smaller than Unilever, with a market value of $106 billion as of Thursday, it is 50.9-percent owned by Buffett’s Berkshire Hathaway Inc and 3G Capital, which also controls Anheuser-Busch InBev.

3G, known for driving profits through aggressive cost cutting, has orchestrated a string of big deals rocking the food and drink industry, including Anheuser-Busch InBev’s takeover of SABMiller and the combination of Kraft and Heinz.

A deal would offer opportunities to combine marketing, manufacturing and distribution in addition to cutting costs, but some industry analysts said Kraft might not want Unilever’s household and personal goods brands and could spin them off.

“This is cheap money meeting industrial logic,” said Steve Clayton, manager of the HL Select UK Shares fund at Hargreaves Lansdown, which owns Unilever shares.

“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,” Clayton added.

Britain’s largest union, Unite, represents employees at Unilever, according to its website. Unite urged Unilever to continue fending off the takeover attempt to prevent job losses.

A Heinz Ketchup bottle sits between a box of Kraft macaroni and cheese and a bottle of Kraft Original Barbecue Sauce on a grocery store shelf in New York City, New York, U.S. March 25, 2015. REUTERS/Brendan McDermid

Unilever employs 168,000 people and generates roughly 17 percent of its revenue in the United States compared with Kraft-Heinz, which generates roughly 78 percent in America.

A recent wave of cross-border deals in Europe is leaving British businesses vulnerable to possible job cuts. Pegeuot SA’s proposed acquisition of General Motors Co’s Opel business may eventually lead to heavy restructuring at the Vauxhall brands, which employ 4,500 people in Britain, sources said.

Centerview and Morgan Stanley are working with Unilever alongside UBS and Deutsche Bank, who are also acting as corporate brokers. Kraft is working with Lazard.</s>Kraft Heinz, the food conglomerate backed by legendary investor Warren Buffett, said Friday that it made a takeover offer for European consumer products king Unilever. But Unilever said no to a deal.

"Kraft confirms that it has 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," Kraft Heinz spokesman Michael Mullen said in a statement to CNNMoney.

"While Unilever has declined the proposal, we look forward to working to reach agreement on the terms of a transaction," Mullen added.

Mullen did not say how much Kraft Heinz offered for Unilever. But the two classes of Unilever (UL) stock surged more than 10% in premarket trading. Unilever is a British-Dutch conglomerate with headquarters in London and Rotterdam.

Unilever (UN)is worth more than $120 billion, though. A takeover of the company would be one of the largest in corporate history.

Unilever was not immediately available for comment.

If the two companies were to merge, the deal would combine the company famous for Kraft macaroni and cheese and Heinz ketchup with the firm that owns the Dove brand of personal care products, Ben & Jerry's ice cream and Lipton tea.

Kraft and Heinz merged in 2015. Two years earlier, Heinz was bought by Buffett's Berkshire Hathaway (BRKB) and private equity firm 3G Capital.

Many investors have been speculating that Buffett and Kraft Heinz were itching to do another big deal. There were rumors late last year that Kraft Heinz might buy Oreo and Cadbury owner Mondelez (MDLZ).

Shares of Kraft Heinz (KHC)were up 5% Friday morning. The stock fell more than 4% Thursday after the company reported disappointing sales.</s>Kraft Heinz, the food conglomerate backed by legendary investor Warren Buffett, said Friday that it made a takeover offer for European consumer products king Unilever. But Unilever said no to a deal.

Unilever said that Kraft Heinz proposed to pay $50 a share for the company, and that Kraft Heinz was offering a mix of cash and stock. That would value Unilever at more than $140 billion, nearly 20% higher than Thursday’s closing price.

Unilever said the offer “fundamentally undervalues” the company.

Kraft Heinz suggested the company could make another offer.

“While Unilever has declined the proposal, we look forward to working to reach agreement on the terms of a transaction,” spokesman Michael Mullen said in a statement to CNNMoney.

The two classes of Unilever stock surged more than 10% in early trading. Unilever is a British-Dutch conglomerate with headquarters in London and Rotterdam.

Shares of Kraft Heinz were up 5% Friday. The stock fell more than 4% Thursday after the company reported disappointing sales.

A takeover of Unilever would be one of the largest in corporate history. It would be the biggest in the food and beverage business, beating the nearly $125 billion merger between beer giants Anheuser-Busch InBev and SABMiller last year.

If the two companies were to merge, the deal would combine the company famous for Kraft macaroni and cheese and Heinz ketchup with the firm that owns the Dove brand of personal care products, Ben & Jerry’s ice cream and Lipton tea.

Unilever has been busy making deals of its own. The company bought Dollar Shave Club for $1 billion last year, then bought eco-friendly diaper and laundry detergent maker Seventh Generation.

There has also been speculation that Unilever was interested in acquiring Honest Co., the personal care products startup backed by actress Jessica Alba.

But if Kraft Heinz does persuade Unilever to do a deal, it would be just the latest big move to bulk up in the world of food and consumer products.

Kraft and Heinz merged in 2015. Two years earlier, Heinz was bought by Buffett’s Berkshire Hathaway and private equity firm 3G Capital. Buffett did not immediately respond to a request for comment.

Many investors have been speculating that Buffett and Kraft Heinz were itching to do another big deal.

There were rumors late last year that Kraft Heinz might buy Oreo and Cadbury owner Mondelez — which used to be part of Kraft and was split into a separate company a few years ago.

But shares of Mondelez fell more than 5% Friday as investors realized that it was probably no longer a target of Kraft Heinz.

Two other food companies that have been mentioned as potential Kraft Heinz targets also fell in early trading.

Campbell Soup and Smucker were lower after reporting disappointing sales. But it’s clear that neither is likely to be bought by Kraft Heinz, either.</s>The deal would be the third-biggest takeover in history but Unilever said Kraft's offer “profoundly undervalues the company."

Kraft Heinz on Friday proposed a megamerger of food giants, offering $143 billion to acquire Unilever in what would be the third-biggest takeover in history.

U.K-based Unilever quickly rejected the offer, calling it “profoundly undervalues the company,” but analysts said Kraft’s move could flush out other bidders.

The proposed merger would combine Unilever’s vast range of consumer brands, including Ben & Jerry’s ice cream, Dove soap, and Hellmann’s mayonnaise, with such Kraft products as Philadelphia cheese and Heinz baked beans and ketchup.

Kraft said it had made “a comprehensive proposal” and looked “forward to working to reach agreement on the terms of a transaction.” It would pay $30.23 per share in cash and 0.222 of a share in a new enlarged entity per Unilever share, representing an 18% premium to the share price on Thursday.

“Unilever rejected the proposal as it sees no merit, either financial or strategic, for Unilever’s shareholders,” the British company said in a news release. “Unilever does not see the basis for any further discussions.”

As The New York Times reports, the offer “came as consumer-goods companies are being squeezed by fluctuating currency rates, such as the strong United States dollar in Kraft Heinz’s case, and higher prices for staples used in their products.”

“It would also signal further consolidation in the sector as makers of consumer goods push for more space in the public’s shopping carts,” the Times added.

Warren Buffett’s Berkshire Hathaway and 3G Capital own 50.9% of Kraft Heinz. 3G “has orchestrated a string of big deals rocking the food and drink industry, including Anheuser-Busch InBev’s takeover of SABMiller and the combination of Kraft and Heinz,” Reuters noted.

Analysts at Jeffries called Kraft’s offer for Unilever a “seismic shock,” while RBC Capital Markets analyst David Palmer said Kraft “will likely need to raise its offer substantially if it hopes to change the outcome.”

Unilever is the fourth largest seller of packaged food worldwide — behind Nestle, PepsiCo, and Mondelez — and Kraft Heinz is the fifth. “The combined entity would have a huge brand footprint and be able to flex bargain muscles even more with supermarkets,” Neil Wilson, an analyst at London broker ETX Capital, told BBC News.</s>Kraft Heinz Co. said it made an approach to Unilever about combining the consumer-goods companies, a deal that would bring together brands including Dove soap and 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 made a “comprehensive proposal” and will seek to gain an agreement on the terms of a transaction, it said.

Unilever said Friday it saw no merit in a proposed merger with U.S. food group Kraft Heinz Co after rejecting a $143 billion offer, saying it “fundamentally undervalues” the Anglo-Dutch consumer goods giant.

Unilever said it had received an offer of $50 per share, made up of $30.23 in cash and the remainder in stock in the new group, representing a premium of 18 per cent.

 “This fundamentally undervalues Unilever,” it said on Friday. “Unilever rejected the proposal as it sees no merit, either financial or strategic, for Unilever’s shareholders. Unilever does not see the basis for any further discussions.”

Unilever shares surged as much as 14 per cent in London and 11 per cent in Amsterdam, valuing the maker of Dove soap at about 111 billion pounds (US$138 billion). Kraft Heinz gained about 3.7 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,” the U.S. company said.

Kraft Heinz is itself the product of a merger. The company was forged by a US$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.

The deal would be the largest takeover ever in the food or beverage industries, surpassing Anheuser-Busch InBev SA’s purchase last year of SABMiller Plc for about US$123 billion including debt, InBev NV’s purchase of Anheuser-Busch Cos. in 2008 and the 2015 transaction that created Kraft Heinz, according to data compiled by Bloomberg.</s>CBJ — Unilever has rejected a $143 billion takeover bid from U.S. food company Kraft Heinz, saying it saw no reason to discuss a deal which it said had no financial or strategic merit.

Unilever, the maker of Lipton tea and Dove soap, said the US$50 per share offer undervalued it and recommended its shareholders take no action, Kraft Heinz said it looked forward to “working to reach agreement on the terms of a transaction.”

Analysts saw this as a sign Kraft was open to a higher bid, although the Anglo-Dutch company said in a statement it saw no basis for further talks. Unilever shares jumped as much as 14% to a record high.

A combination of the two multinationals would be the third-biggest takeover in history and the biggest ever acquisition of a UK-based company.

The Kraft Heinz approach comes as the global packaged food industry grapples with slowing growth, new competition from upstart brands, deflation in developed markets and increasingly health-conscious consumers.

Unilever has a larger presence than some peers in emerging markets, which were once the big driver of industry growth, but which have slowed in recent years. It is also feeling the after-effects of Britain’s decision to leave the European Union.

Although Kraft is smaller than Unilever, with a market value of $106 billion as of Thursday, it is 51% owned by billionaire Warren Buffett’s Berkshire Hathaway and 3G Capital, the private equity firm that also controls Anheuser-Busch InBev. It has been widely expected to do a deal this year, given earlier reports that 3G had raised a new fund.

3G has orchestrated a string of big deals rocking the food and drink industry, including Anheuser-Busch InBev’s takeover of SABMiller and the combination of Kraft and Heinz.</s>Unilever has rejected a $143bn takeover bid from Kraft Heinz, the US food giant, saying the offer was too low.

If the deal went ahead, it would have been one of the biggest in corporate history, with Unilever currently valued at more than £100bn ($124bn).

Kraft, behind brands like Heinz ketchup and Philadelphia cream cheese, indicated it would continue to work towards striking a deal.

“While Unilever has declined the proposal, we look forward to working to reach agreement on the terms of a transaction,” the company said in a statement.

However Unilever, the Anglo-Dutch company which owns Marmite, Ben & Jerry’s ice cream, and PG Tips among others, said it “does not see the basis for any further discussions”.

“Unilever rejected the proposal as it sees no merit, either financial or strategic, for Unilever’s shareholders,” the company, which is the world’s fourth-largest consumer goods company by sales, added.

After Kraft Heinz confirmed its bid, shares in Unilever, which is listed on the UK’s FTSE 100 stock index, surged 12.5 percent to £37.59 ($46.72), hitting their highest level on record going back to 1983.

Kraft Heinz shares, on the other hand, had their biggest one-day fall since May 2016 yesterday, dropping 4.2 percent to $87.28.

“With Kraft Heinz saying it’ll be coming back to the table, it looks like the initial offer was just to test the water,” said Nicholas Hyett, an equity analyst at Hargreaves Lansdown.

Under UK takeover rules, Kraft Heinz has until the close of business on March 17 to make a firm bid or abandon talks for six months.

Any deal is likely to come under scrutiny from competition watchdogs.</s>It is being reported today that the UK-based household goods company Unilever has rejected a $143 billion takeover bid from Kraft Heinz, saying it saw "no merit, either financial or strategic" in joining forces with the U.S. food giant.

Despite the strong rejection, Warren Buffett, part-owner of Kraft Heinz, said he looked forward "to working to reach agreement on the terms of a transaction."

The infographic below takes a look at how the two companies compare in terms of profit, size and brand value.
British-Dutch consumer goods company Unilever rejects a US$143 billion takeover from Kraft Heinz, saying the deal had no financial or strategic merit. Nevertheless, Kraft is still interested in finding agreement; it has until March 17 to make a final bid under UK takeover rules.