Consumer goods giants are planning a merger that will happen between Kraft Heinz and Unilever, perhaps the two largest corporate companies. Kraft Heinz’ brands are pretty recognizable in the market and include Maxwell House coffee, but also Oscar Mayer meats, as well as Philadelphia spreads. As for Unilever, some of its brands include Lipton team, Best Foods, Dove soap and many others.
Kraft Heinz Looking To Merge With Unilever
Kraft Heinz has set its goal to tie a $ 143 billion merger contract with consumer goods company Unilever, which – if it takes place, will be the largest corporate deal we have seen in the recent time.
The same deal might also trigger a round of cost cutting. However, even after Unilever has rejected the merger idea, Kraft Heinz has no idea to stop pursuing the deal.
The Third Biggest Deal Ever
If Unilever accepts the mergerthat would mean that these two global companies will emerge in the market stronger than ever and oppose the rising trend of using natural products.
As for the deal itself, it is estimated that it would be the third largest merger of all time, while merger of companies such as Mannesmann – Vodafone and Time Warner – American Online, would be the only deals bigger than this one.
Is Kraft Heinz Undervaluing Unilever?
Even though a comprehensive proposal has been made to Unilever about the merger on the behalf of Kraft Heinz, Unilever has declined the said proposal. Kraft Heinz also stated that even though their proposal has been declined, they still look forward to working out an agreement and merge two companies. The reason why Unilever has declined the merger deal was as they put it and offer which in their opinion undervalues Unilever.
This only further confirmed Unilever, which is London-based, sees no financial or strategic point of the merger, and the company also stated that they see no basis for further discussions. As for their sales and success in the market while Kraft Heinz, reports fall of its organic in the USA for over 3%, Unilever records flat sales due to disruptions in the economical market. Namely for markets such as Brazil and India.
How Will The Merger Affect The Consumers?
However, based on the valuations of their stock are worth more than $100 billion combined. That being said, Kraft Heinz shares rose to $96.65 and Unilever’s to $44.90, but Unilever is still worth slightly more than Kraft Heinz. The merger deal would also probably result in cost reductions of products which overlap in offer, such as sauces and soups. Reduction of prices would definitely be welcomed by many customers.