Published: Sat, February 18, 2017
Markets | By Lucia Cruz

U.S. stocks end at records as Kraft Heinz, Unilever surge


Several analysts have released their opinion on The Kraft Heinz Company (NASDAQ:KHC), with 8 analysts believing it is a strong buy.

Britain's largest union, Unite, said it is seeking a meeting with Marmite to PG Tips maker Unilever, after it emerged that Kraft Heinz had made a surprise $143 billion takeover bid. Unilever and Kraft, however, subsequently said the offer had been rejected.

This was met with Unilever saying it is rejecting the offer as it "sees no merit, either financial or strategic, for co. shareholders" and does not see any basis for further discussions with Kraft Heinz.

Kraft Heinz counts famous United States investor Warren Buffet and Brazilian investment firm 3G Capital amongst its investors.

The announcement came in reaction to speculation that Pittsburgh-based food maker Kraft Heinz and Netherlands and United Kingdom -headquartered Unilever would merge in a climate of slow growth, volatility in emerging markets and a trend among US customers toward natural products. Zacks Investment Research upgraded shares of The Kraft Heinz Company from a "sell" rating to a "hold" rating in a report on Friday, January 20th. MA ended last trade at $87.28 a share and the price is up more than -0.05% so far this year.

Kraft is a food company, purely and simply, with a heavy reliance on US sales, where price increases are hard to pass on and shopping habits and tastes are seemingly changing by the hour.

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Price Target plays a critical role when it comes to the Analysis of a Stock.

The pair of investors were the major players behind the merger of Kraft Foods and Heinz in 2015 and last year's brewing mega-merger between AB InBev (ABI) and SABMiller. The firm had revenue of $6.86 billion for the quarter, compared to the consensus estimate of $6.73 billion.

Analysts at Jeffries called Kraft's offer for Unilever a "seismic shock", while RBC Capital Markets analyst David Palmer said Kraft "will likely need to raise its offer substantially if it hopes to change the outcome".

Competition regulators would be expected to scrutinise any transaction to combine the two companies.

Kraft Heinz is itself the result of a recent buyout.

This followed a Financial Times post breaking the news early on Friday that Unilever had been approached to create one of the world's largest consumer goods companies.

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