Following its rejected bid to take over consumer goods giant Unilever, Kraft Heinz may look to acquire some of the group's food brands, according to Euromonitor International.
“Although there was little incentive for Unilever to accept this initial merger offer, Kraft Heinz and 3G Capital’s willingness to pursue a deal could ultimately encourage Unilever to seek a deal to offload some of its food brands, to which Kraft Heinz would seek to apply aggressive cost reductions," commented Raphael Moreau, food analyst at Euromonitor International.
However, Moreau noted that there would likely be competition issues associated with some parts of the business, should Kraft Heinz seek to acquire certain brands.
"While creating synergies in sauces and soups could be a rational for such a deal, a combination of Heinz and Hellmann in mayonnaise could struggle to be given approval by competition authorities," he said. "Its search for a mega-merger could see 3G Capital settle for a smaller deal under which group synergies would be more achievable.”
Unilever has issued a statement saying that the proposed deal from Kraft Heinz 'fundamentally undervalues' the business. 'Unilever rejected the proposal as it sees no merit, either financial or strategic, for Unilever's shareholders', it said.
Unilever shares surged by as much as 15% following news of Kraft Heinz' proposed bid, which valued the company at around $140 billion.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
