Unilever, owner of Dove soap and Lipton tea, had rejected Kraft’s bid on Friday, saying it saw “no merit, either financial or strategic”.
Kraft was expected to return with a higher offer but the companies announced on Sunday the proposed deal had been binned.
Kraft decided withdraw its offer as it believed it was too difficult to negotiate following the public disclosure of its bid so soon after its approach to Unilever, Reuters reported, citing people familiar with the situation.
It is understood the resistance from Unilever was unexpected by Kraft but key concerns during the talks had included differences between corporate culture and potential UK government scrutiny. UK Prime Minister Theresa May had reportedly requested an examination of the deal before it was thrown out.
“Kraft Heinz’s interest was made public at an extremely early stage,” Kraft Heinz spokesman Michael Mullen said in a statement.
“Our intention was to proceed on a friendly basis, but it was made clear Unilever did not wish to pursue a transaction. It is best to step away early so both companies can focus on their own independent plans to generate value.”
Kraft was forced to reveal the details of its bid to the public on Friday to comply with Britain’s takeover rules after stock traders caught wind of the proposed merger.
The public withdrawal of its offer means Kraft will be unable to approach Unilever again for another six months, according to UK takeover rules.
It would have marked the third biggest takeover in history and the largest acquisition of a UK-based company, according to Thomson Reuters data. The merged company would have $82bn in sales.
Story by ProactiveInvestors