Will Kraft Heinz Make Another Bid For Unilever?

GantNews, a CNN News Affiliate, on July 12 reported that Susquehanna Financial Group analyst Pablo Zuanic earlier this week suggested that another bid by Kraft Heinz for Unilever “is now more than 75% likely”.  Furthermore, this second attempt by Kraft Heinz to acquire Unilever could come as early as August 19.

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Unilever, which is co-headquartered in the U.K., is subject to the British law that says six months must pass before a company can try to make another offer for a firm it previously tried to acquire.  Kraft Heinz and Unilever jointly announced on February 19 that Kraft Heinz agreed to “amicably” withdraw its bid.  Therefore, Kraft Heinz could return with another bid as early as August 19.  Supporting this conjecture is the fact that Kraft Heinz has not made any attempt to buy another food company in the ensuing five months since February 19.

Unilever may have left its door open on a subsequent deal after Kraft Heinz withdrew its bid by stating “Unilever and Kraft Heinz hold each other in high regard” and that “Kraft Heinz has the utmost respect for the culture, strategy and leadership of Unilever”.

Since Unilever’s shares have risen about 30% since receiving Kraft Heinz’s bid, the original offer of $143 billion may now have to be increased to about $200 billion for it to receive serious consideration.  Kraft Heinz is partly owned by 3G Capital Partners and Warren Buffett’s Berkshire Hathaway.

About the Author

Dr. David Kass
David I Kass Clinical Associate Professor, Department of Finance Ph.D., Harvard University Robert H. Smith School of Business 4412 Van Munching Hall University of Maryland College Park, MD 20742-1815 Phone: 301-405-9683 Email: dkass@rhsmith.umd.edu (link sends e-mail) Dr. David Kass has published articles in corporate finance, industrial organization, and health economics. He currently teaches Advanced Financial Management and Business Finance, and is the Faculty Champion for the Accelerated Finance Fellows. Prior to joining the faculty of the Smith School in 2004, he held senior positions with the Federal Government (Federal Trade Commission, General Accounting Office, Department of Defense, and the Bureau of Economic Analysis). Dr. Kass has recently appeared on Bloomberg TV, CNBC, PBS Nightly Business Report, Maryland Public Television, Business News Network TV (Canada), Fox TV, American Public Media's Marketplace Radio, and WYPR Radio (Baltimore), and has been quoted on numerous occasions by Bloomberg News and The Wall Street Journal, where he has primarily discussed Warren Buffett and Berkshire Hathaway. He has also launched a Smith School “Warren Buffett” blog. Dr. Kass has accompanied MBA students on trips to Omaha for private meetings with Warren Buffett, and Finance Fellows to Berkshire Hathaway’s annual meetings. He is an officer of the Harvard Business School Club of Washington, DC, and is a member of the investment and budget committees of a local nonprofit organization. Dr. Kass received a Smith School “Top 15% Teaching Award” for the 2009-2010 academic year.