LONDON Feb 20 Shares in Anglo-Dutch consumer
goods group Unilever dropped 8 percent on
Monday after U.S. rival Kraft Heinz Co abruptly ditched
its surprise $143 billion merger proposal.
Backed by Warren Buffett and the private equity firm 3G,
Kraft had wanted to buy Unilever to build a global consumer
goods giant but its offer was flatly rejected on Friday by the
maker of Lipton tea and Dove soap.
According to people familiar with the matter, Kraft had not
expected to encounter the resistance it received from Unilever
Chief Executive Paul Polman, who dismissed the offer as having
no financial or strategic merit.
Concerns had also been raised about political scrutiny in
Britain where Prime Minister Theresa May had indicated she would
be more proactive in vetting foreign takeovers when she took
office last year.
May had previously singled out Kraft's 2010 acquisition of
another British household name, Cadbury Plc, as an example of a
deal that should have been blocked. The Financial Times said May
had ordered officials to see if the proposed deal raised any
concerns for the wider British economy and merits government
3G made its name in corporate America by orchestrating large
debt-laden acquisitions and then slashing costs dramatically to
Unilever's London-listed shares, which jumped 13 percent on
Friday when the approach was made public, fell 8 percent in
early trading on Monday.
A combination of the two firms would have been the largest
acquisition of a UK-based company, according to Thomson Reuters
It would have brought 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
But the premature exposure of Kraft's bid left the
aggressive acquisition machine scrambling to craft an appetizing
message for shareholders, the press, Unilever's rank and file,
and British and Dutch leaders.
(Reporting by Kate Holton; editing by Guy Faulconbridge)