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> 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> 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. </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> 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> 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> 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> 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> 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.
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.