March 18 (Reuters) - Unilever and Kraft Heinz held talks to merge Unilever's food business and Kraft Heinz's condiments division, the Financial Times reported on Wednesday, citing people familiar with
Unilever, Kraft Heinz held talks to merge food business and condiments division, FT reports
Overview of Unilever and Kraft Heinz Merger Discussions
Background and Context
March 18 (Reuters) - Unilever and Kraft Heinz had recently held talks over a potential merger of parts of their food businesses, the Financial Times reported on Wednesday, as the consumer goods companies grapple with weaker demand for packaged foods amid economic uncertainty.
Details of the Merger Talks
But the discussions, which involved combining Unilever's food division with Kraft Heinz's condiments business, have since ended, the FT said, citing people familiar with the matter.
Potential Impact of the Deal
A deal could have created a new entity worth tens of billions of dollars, bringing brands such as Hellmann's mayonnaise and Heinz ketchup under one roof.
Unilever's Strategic Moves
Unilever is now weighing a broader separation of its food assets, Bloomberg News reported on Tuesday, citing people familiar with the matter. Its shares closed 3.5% lower on Wednesday on investor concerns that the consumer goods gaint would get "distracted" by a potential spinoff.
Reactions from Companies
Both Unilever and Kraft Heinz declined to comment to Reuters.
Kraft Heinz's Recent Decisions
Kraft Heinz had in February halted efforts to split the company, as the new CEO Steve Cahillane said was necessary due to deteriorating conditions in the food industry.
Struggles Since Previous Merger
The packaged-foods maker, whose shares were down nearly 4% in extended trading, has been struggling since its merger engineered by Warren Buffett and 3G Capital.
Timeline of the Talks
The talks with Unilever occurred before the U.S. group decided in February to drop plans for a break-up and instead invest $600 million in a turnaround under CEO Steve Cahillane, who took charge in January, the FT report said.
Proposed Split Details
The proposed split would have separated its slower-growth grocery staples — including Oscar Mayer and Lunchables meal kits— from its sauces and spreads business that houses Heinz ketchup and Philadelphia cheese, the report said.
Reporting Credits
(Reporting by Kanjyik Ghosh in Barcelona, Sanskriti Shekhar in Bangalore. Editing by Jane Merriman)
