Unilever rejects proposed mega-merger with Kraft Heinz

Consumer goods giant Unilever has rebuffed a proposed mega-merger with global food firm Kraft Heinz.

The company behind Heinz Tomato Ketchup and Philadelphia cheese said it had made a "comprehensive proposal" about combining the two companies, but Unilever turned the offer down.

In an announcement, Kraft Heinz said: "While Unilever has declined the proposal, we look forward to working to reach agreement on the terms of a transaction.

"There can be no certainty that any further formal proposal will be made to the board of Unilever or that an offer will be made at all or as to the terms of any transaction."

Unilever, which owns Dove, Ben & Jerry's ice cream and Domestos, saw its share price rocket 12% in London on news of the approach.

The Anglo-Dutch firm said the offer represented a premium of 18% of its closing share price on February 16, valuing the company at 143bn US dollars (£115bn).

Steve Clayton, fund manager at Hargreaves Lansdown, said such a move would create enormous cost savings.

"Putting portfolios of brands together can create huge synergies across marketing, manufacturing and distribution, even before you think about cutting the combined HQ back to size.

"Kraft Heinz are attempting a massive push on the fast forward button, for to acquire the sheer scale of brands that Unilever represents through one-off acquisitions could take decades. With debt cheap and abundant right now, Kraft have spotted their opportunity."