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Family-backed investors drop $143bn Unilever takeover bid

A proposed $143 billion takeover of consumer giant Unilever by family-backed Kraft Heinz has been withdrawn less than 48 hours after the deal was first tabled.
Warren Buffett, Berkshire Hathaway

A proposed $143 billion takeover of consumer giant Unilever by family-backed Kraft Heinz has been withdrawn less than 48 hours after the deal was first tabled.

Kraft Heinz made an initial offer on 17 February but withdrew it on 19 February with both companies issuing an unusual joint statement: “Unilever and Kraft Heinz hold each other in high regard. Kraft Heinz has the utmost respect for the culture, strategy and leadership of Unilever.”

Commentators said political resistance to the takeover of the Anglo-Dutch conglomerate, notably by the UK prime minister Theresa May, was behind the decision to withdraw the offer.

Kraft Heinz, which is controlled by the Buffett family’s Berkshire Hathaway (26.8% stake) and 3G Capital (24.2% stake), was formed in July 2015 when the two family-backed investment firms partnered to combine Kraft and

Heinz into the fifth-largest food and beverage company in the world.
3G Capital is a Brazilian multibillion-dollar investment firm, controlled by five founding partners including Carlos Alberto Sicupira, Jorge Paulo Lemann and Marcel Telles.

It is behind some of the world’s largest corporate deals in the past decade.
Affiliates of 3G’s partners have been meaningful shareholders of AB InBev since 1989 and were behind its ‘mega-brew merger’ with SAB Miller last year.

May ordered her top officials to examine the proposed deal to see if it raised concerns for the wider British economy and merited government intervention.

Her actions following Kraft’s controversial takeover of Cadbury in 2010.

John Colley, a professor of practice at the UK’s Warwick Business School, said: "In a surprising move, Kraft Heinz has withdrawn its $143 billion bid just over two days after it was made public. It appears to have been the reaction of governments which made the difference. Clearly, the trend towards protectionism in the USA is being reflected in the UK and Holland.
 

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