Unilever and Kraft Heinz Held Food Merger Talks – FT

Unilever (LON: ULVR) and Kraft Heinz explored a potential merger of parts of their food portfolios, according to a report from the Financial Times.

The discussions, which have since ended, centred on combining Unilever’s broader food division with Kraft Heinz’s condiments unit, people familiar with the matter told the newspaper.

The news follows a Bloomberg report on Tuesday, which said Unilever is exploring a potential separation of its food division as part of a broader effort to streamline its portfolio.

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Such a deal would have created a multibillion-dollar food powerhouse, bringing household brands such as Hellmann’s mayonnaise, Heinz ketchup and Philadelphia cream cheese under one ownership structure.

However, the talks did not progress, and neither company commented publicly, it was noted.

The Financial Times reported that conversations took place before Kraft Heinz decided in February to halt its own internal break-up plan.

The U.S. group had been considering separating its slower-growth grocery staples, including Oscar Mayer and Lunchables, from its sauces and spreads division.

Under new chief executive Steve Cahillane, Kraft Heinz instead opted to abandon that restructuring and invest $600 million in a turnaround effort.

The report comes as Unilever faces renewed scrutiny over the future of its food business. The report earlier this week said the company is exploring a potential separation of most or all of its food assets.

Unilever shares closed 3.4% lower on Tuesday. The stock is now down 2.9% year to date.