UK

Kraft Heinz Withdraws £115 Billion Bid For Unilever - But Brexit Means UK Firms Are 'Sitting Ducks'

Pound’s fall makes British companies takeover targets.

19/02/2017 23:29 GMT | Updated 19/02/2017 23:32 GMT
AP

US food giant Kraft Heinz has withdrawn a £115 billion bid for a mega-merger with Unilever, the firms have said.

In a joint statement on Sunday, the Heinz Tomato Ketchup and Philadelphia cheese manufacturer said it had agreed not to proceed with the offer it made on Friday for the Anglo-Dutch firm, which makes Marmite and PG Tips.

Unilever has 7,500 staff in the UK, based at its London headquarters and three research facilities at Port Sunlight, Colworth and Leeds.

The deal’s collapse will be a relief to Theresa May as the Prime Minister has vowed to do more to block hostile takeovers when British jobs are at stake.

Many have warned the pound’s tumble by around 20 per cent since the Brexit vote makes UK companies vulnerable to a takeover.

Former Business Secretary Vince Cable said tonight “many less famous names are sitting ducks” following the referendum.

Unilever also makes Pot Noodles, Lynx deodorant and Domestos bathroom cleaner.

When UK companies were bought or faced closure, May warned at the Tory Party conference last year: “Workers have a stake, local communities have a stake, and often the whole country has a stake.”

Unilever had already snubbed the offer, which represented an 18% premium on its closing share price of 50 US dollars per share (£40.26) on February 16, saying it “fundamentally undervalues” the firm.

The joint statement read:

“Unilever and Kraft Heinz hereby announce that Kraft Heinz has amicably agreed to withdraw its proposal for a combination of the two companies.

“Unilever and Kraft Heinz hold each other in high regard.

“Kraft Heinz has the utmost respect for the culture, strategy and leadership of Unilever.”