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Unilever says Kraft Heinz is biting off more than it can chew


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Unilever says Kraft Heinz is biting off more than it can chew

Household goods firm Unilever has firmly rejected a surprise takeover bid from US food company Kraft Heinz.

The Americans offered $143 billion (135 billion euros) for the Anglo-Dutch firm which is well known for brands such as Lipton tea and Dove soap.

Unilever is adamant and said it saw no reason to discuss a deal which it said had no financial or strategic merit.

Kraft said it would continue to pursue the bid.

A combination of the two multinationals would be the third-largest takeover in history and the biggest ever acquisition of a UK-based company.

Unilever’s London-listed shares jumped 13.2 percent, hitting a record high and posting their best day in 30 years, and the broader household and personal goods sector rose 2.8 percent to a new high.

Analysts, however, were unconvinced.

“The approach by Kraft-Heinz is a total surprise. Unilever has double the revenue of Kraft for instance,” Jauke de Jong, analyst at AFS Group, said.

“Unilever would be on strong grounds to state that the offer materially undervalues the company, with recent large cap consumer staples transactions having been conducted on higher multiples,” analysts at Barclays said in a note.

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