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| Kraft Heinz approaches consumer goods giant Unilever about possible merger | |
| (35 minutes later) | |
| US food giant Kraft Heinz has approached Unilever about a possible merger, but the Anglo-Dutch company declined a tie-up, Kraft said on Friday. | |
| "Kraft Heinz 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 said in a statement. | |
| "While Unilever has declined the proposal, we look forward to working to reach agreement on the terms of a transaction." | "While Unilever has declined the proposal, we look forward to working to reach agreement on the terms of a transaction." |
| The company added, however, that "there can be no certainty that any further formal proposal will be made to the boards of Unilever or that an offer will be made at all or as to the terms of any transaction". | |
| UK listed shares of Unilever surged on the news and were recently trading around 13 per cent higher on the day. | UK listed shares of Unilever surged on the news and were recently trading around 13 per cent higher on the day. |
| Kraft, which is controlled by private equity firm 3G Capital, is best known for brands like Philadelphia spread, Capri Sun soft drinks, HP Sauce and Heinz ketchup. | |
| Unilever's brand include Domestos, Dove, Persil and Bertolli olive oil. | |
| According to Thomson Reuters data, Kraft currently has a market cap of around $106bn (£85bn), compared to Unilever's €117bn (£100bn) before Friday's announcement, meaning that a deal would be one of the biggest corporate tie-ups in history. | |
| "The combined entity would have a huge brand footprint and be able to flex bargain muscles even more with supermarkets," Neil Wilson, a market analyst at ETX Capital in London, said. | |
| He said that any deal would likely face major scrutiny from regulators and competition authorities, "as it would create a giant in the sector". | |
| Global corporate merger and acquisition activity has flourished in recent quarters and last month marked the busiest January for deals in Europe, the Middle East and Africa in over a decade, according to data from Thomson Reuters. | |
| Deals completed last month in the region had a total value of $90.8bn, according to the company, which was the highest volume for any January since 2006. | |
| Johnson & Johnson's $29.3bn takeover of Swiss biotech company Actelion and the $25bn merger of Italian eyewear group Luxottica and France's Essilor particularly boosted volumes. | |
| Cross-border deals also rose to their highest January level since 2006 this year, hitting $106.8bn, up 31 per cent on January 2016. | |
| Globally, M&A activity hit $258.2bn in January, a 38 per cent surge on the same month last year and the highest level for the month since 2011, according to Thomson Reuters. |