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Kraft Heinz withdraws Unilever merger proposal

US food giant Kraft Heinz (Swiss: KHC.SW - news) has withdrawn a £115bn bid for a mega-merger with Unilever (NYSE: UL - news) , the firms have said.

In a joint statement on Sunday Heinz said it had agreed not to proceed with the offer it made on Friday.

Unilever, the Anglo-Dutch Marmite and PG Tips maker, had already snubbed the offer, saying it "fundamentally undervalues" the firm.

The joint (Frankfurt: 1JO.F - news) statement read: "Unilever and Kraft Heinz hereby announce that Kraft Heinz has amicably agreed to withdraw its proposal for a combination of the two companies.

"Unilever and Kraft Heinz hold each other in high regard.

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"Kraft Heinz has the utmost respect for the culture, strategy and leadership of Unilever."

Sky (Frankfurt: 893517 - news) 's City Editor Mark Kleinman said: "My understanding is that after this news [of the proposed takeover] broke on Friday ... the reaction of Unilever itself, which was very hostile ... has given Kraft Heinz effectively no alternative but to pull-out.

"In the end this is going to go down as one of the most bizarre takeover situations in recent British history."

Unilever saw its London stock value rocket 12% on news of the proposal.

Kraft Heinz had remained optimistic a deal could still be reached, saying on Friday: "While Unilever has declined the proposal, we look forward to working to reach agreement on the terms of a transaction."

However, it said there was "no certainty" a formal offer would be made.

The US food giant had had until 17 March to table an official bid.

If successful, the tie-up would have been the biggest acquisition of a British company on record based on offer value.