Shares in Marmite maker Unilever slip as Kraft Heinz offer canned

Shares (Berlin: DI6.BE - news) in Marmite maker Unilever (NYSE: UL - news) have slumped by 8% after US rival Kraft Heinz (Swiss: KHC.SW - news) abandoned its £115bn offer to swallow up the consumer goods giant.

The deal proposed by the American maker of Heinz ketchup and Philadelphia cheese would have brought together some of the world's best-known brands.

Shares in Anglo-Dutch group Unilever (Amsterdam: UZ8.AS - news) - which also makes Persil, Dove soap and PG Tips - had surged on Friday when details of the approach first emerged.

It would have been the biggest ever acquisition of a UK-listed company.

But Unilever immediately rejected the offer saying it "fundamentally undervalues" the company.

Two days later the short-lived proposal was off the table as a joint statement announced that the two had "amicably agreed" on a withdrawal.

Trade union Unite welcomed the decision saying it would be a relief to thousands of workers across the UK.

Any deal had looked likely to face intense political scrutiny while Kraft Heinz was reported to have been taken aback by the initial resistance of Unilever to the offer.

It had been forced to disclose the offer publicly at an earlier stage than planned after rumours circulated among traders.

Heinz had purchased Kraft in a previous mega-deal in 2015.

Kraft's previous takeover of Cadbury's in 2010 attracted controversy when it reneged on a pledge to keep open a plant near Bristol, resulting in hundreds of job losses.

That division of the US giant has since been spun off as a separate company, Mondelez.

Kraft Heinz is controlled by billionaire US investor Warren Buffett and Brazilian investment firm 3G Capital (Other OTC: CGHC - news) .

George Salmon, equity analyst at Hargreaves Landsdown, said: "The deal going through was far from a formality.

"However, it is still surprising to see it shelved just one business day after the initial news broke.

"The deal was set to top £100bn, so the size premium would always have been a consideration- especially since Warren Buffett, one of the biggest names behind the bid, hardly has a reputation for paying anything other than the price he sees fit."

Unilever was last year involved in a dispute with Tesco (Frankfurt: 852647 - news) due to attempts by the firm to raise wholesale prices by up to 10%, following the collapse in sterling after the Brexit vote.