Kraft had made a surprise offer for Unilever to build a global consumer goods behemoth that was flatly rejected on Friday by Unilever, the maker of Lipton tea and Dove soap.
Kraft withdrew its offer because it felt it was too difficult to negotiate a deal following the public disclosure of its bid so soon after its approach to Unilever, according to people familiar with the matter who requested anonymity to discuss confidential deliberations.
Kraft had not expected to encounter the resistance it received from Unilever, one of the people said. Some key concerns raised during talks included potential UK government scrutiny, as well as differences between the companies’ cultures and business models, the person added.
“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 publicly disclose its offer on Friday to comply with Britain’s takeover regulations, after rumors of its approach to Unilever circulated among stock traders.
Under UK takeover rules, Kraft’s public withdrawal of its offer precludes it from reviving takeover talks with Unilever for six months.
A combination would be the third-biggest takeover in history and the largest acquisition of a UK-based company, according to Thomson Reuters data. The combined entity would have $82 billion in sales.
The premature exposure of Kraft’s bid left the aggressive acquisition machine scrambling to craft an appetizing message for shareholders, the press, Unilever’s rank and file, and British and Dutch leaders.