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.
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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.
