Krafty Move Falls at the First Hurdle
The US food giant Kraft Heinz shocked the financial world little over a week ago, scrapping its $140bn takeover bid for Unilever, just two days after the news of the offer was leaked. This move would have been the 2nd largest corporate takeover ever, and the largest as UK takeovers go. It’s therefore little surprise that many Unilever chiefs, and UK politicians, are now wiping the sweat clean off their foreheads.
Kraft has an infamous history of UK takeovers that have left little love lost between the UK and our American counterparts. One only needs to look at Kraft’s coup of Cadburys back in 2010 as example of this bitter tension of foreign firms taking over our most prestigious family run businesses.
This takeover could have led to huge conflicts of interests between big business and the government. However, the deal was quashed almost before it began. The deal was unsatisfactory according to Unilever. Kraft spokesperson Michael Mullen said: “Our intention was to proceed on a friendly basis, but it was made clear Unilever did not wish to pursue a transaction”. Not only is the haste of the rejected offer a surprise, but the element of stubbornness towards the deal. UK politicians have often drawn intense scrutiny for the manner in which our establishments are churned into foreign hands. It would appear however, that murmurs in Downing Street over that weekend, proved significant, with Theresa May and Business Secretary Greg Clark exchanging discussions with both companies.
The political ramifications of this deal could have proven catastrophic, and one the UK could ill-afford given the tumultuous Brexit ride being endured. It stills remains to be seen as to who exactly pulled the plug at such an early stage. But politics had a part to play, and I doubt it will be the last time it does when the stakes for protecting UK business are so high.
By Matthew Brown
Photo from : (The Conversation)