Anglo-Dutch food company Unilever (LON:ULVR) have declined a $143 billion merger proposition from American food giant Kraft, causing shares to surge in Friday afternoon trading.
After significant market speculation, Kraft said in a statement that it had proposed a merger with $125 billion Unilever in what would have been one of the biggest deals in history. However, the offer was declined by household name Unilever, who produce goods including Marmite, Dove and Hellmans.
It a statement, Unilever said the offer “fundamentally undervalues Unilever,” adding:
“Unilever rejected the proposal as it sees no merit, either financial or strategic, for Unilever’s shareholders. Unilever does not see the basis for any further discussions.”
Kraft Heinz said in a statement that it “notes the recent speculation regarding a possible combination of Kraft and Unilever plc”.
It continued: “Kraft confirms that it has made a comprehensive proposal to Unilever about combining the two groups to create a leading consumer goods company with a mission of long-term growth and sustainable living.”
Kraft added that it intended to pursue a deal with Unilever, but added that “there was 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 shares rose nearly 15 percent on the news, currently trading up 13.76 percent at 3,808.62 (1348GMT).
Unilever shares rise as world stock markets fall ahead of the weekend on Friday. MSCI’s index of Asia-Pacific shares outside Japan fell 0.2 percent, and the pan-European STOXX 600 index was 0.5 percent lower, despite continuing to hover around its highest level in 13 months.
“As long as the fundamentals and the earnings story continue to carry through, there’s a reason to be invested in these stock markets,” said Nandini Ramakrishnan, global market strategist at JPMorgan Asset Management told Reuters on Friday.