NEW YORK—U.S. food giant Kraft Heinz Co. confirmed that it’s made an offer to buy Europe’s Unilever and been rejected.
The company said Friday that talks are ongoing, but that no deal can be assured.
Kraft Heinz, maker of Oscar Mayer meats, Jell-O pudding and Velveeta cheese, said there’s no certainty that it will even make another offer.
Unilever’s brands include Hellmann’s, Lipton and Knorr.
Unilever said Friday it rejected the $50 a share proposal, comprising about two-thirds in cash and a third in new stock. The approach “fundamentally undervalues” the company, Unilever said, adding that it doesn’t see a basis for further discussions. Kraft Heinz said earlier it would seek to gain an agreement on the terms of a transaction.
Shares of Kraft Heinz and Unilever rose sharply before the opening bell Friday.
Unilever shares surged as much as 15 per cent to a record in London, valuing the maker of Hellmann’s mayonnaise at more than 113 billion pounds ($140 billion U.S.). The stock gained as much as 12 per cent in Amsterdam, while Kraft Heinz gained about 4.7 per cent in pre-market trading in New York.
Putting together Kraft Heinz and Unilever would create a company with combined sales of $84.8 billion last year. That would have ranked second among food and beverage companies, trailing Nestle SA’s $91.2 billion, according to data compiled by Bloomberg.
Kraft Heinz is itself the result of a recent buyout.
Two years ago, H.J. Heinz Co., owned by Warren Buffett’s Berkshire Hathaway and Brazilian investment firm 3G Capital, announced a $45 billion takeover of Kraft Foods.
Companies like Kraft Heinz and Unilever are trying to catch up to rapidly changing consumer tastes as more people steer clear of processed foods. They are changing up the foods they offer and cutting costs.
With files from Bloomberg
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