Mix Heinz ketchup and Ben & Jerry’s ice cream together, and what do you get?
Kraft Heinz—which was created when Kraft, the US packaged foods giant, agreed to be bought by Heinz in 2015 in a $40 billion deal—now wants to to acquire the Anglo-Dutch consumer products giant Unilever, a marriage that, if it happens, would be the largest of its kind.
Unilever today has already rejected the proposal, but Kraft Heinz has signaled it plans to be persistent. “We look forward to working to reach agreement on the terms of a transaction,” the company said.
Unilever is the world’s fourth-largest consumer goods company by sales, pulling in €52 billion ($55 billion) in revenue last year. The company’s shares shot up by as much as 13% on the news, their biggest one-day rise in 30 years, giving the company a market value of more than $130 billion.
If Unilever eventually accepts, it would create the world’s most sprawling food company, surpassing the size of Nestlé and bringing hundreds of name brands that consumers across the globe see in their supermarkets everyday under one roof.
Besides Kraft and Heinz, the Kraft Heinz Co. owns brands like Oscar Mayer, Ore-Ida, Velveeta, Jell-O, Weight Watchers, Grey Poupon, Kool-Aid, Planters, Capri-Sun, and many many more.
Unilever, meanwhile, runs personal care brands like Dove, Surf, Axe, and St Ives. In food, its stable includes Ben & Jerrys, Knorr, Lipton, Magnum, Bertolli, Bovril, Klondike, Colman’s, Marmite, Pot Noodle… the list goes on.
This kind of mega-merger is in vogue at the moment, as massive global brands have been facing challenges beyond their control, such as the rising prices of raw commodities, stalled global economic growth, and fluctuating exchange rates (the US dollar is extremely strong at the moment, making this a good time to acquire foreign companies.)
Kraft Heinz is controlled by Brazil’s “buyout kings,” 3G Capital Partners, and Warren Buffett, the world’s second-richest man, who this week also signalled his interest in another big mega-merger: that between Bayer and Monsanto.
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