JORGE PAULO LEMANN (pictured), a Brazilian investor, is ill-accustomed to failure. On February 17th Kraft Heinz, backed by Mr Lemann’s 3G Capital, said it had bid $ 143bn for Unilever, a maker of food and personal products. 3G has gobbled many a consumer firm, slashed costs, then bought an even bigger one. Even so, the Unilever bid was surprising in its audacity—the merger would have been the second-largest ever. As shocking, it collapsed two days later.
Kraft Heinz had hoped to continue talks in private, but news of its offer leaked out. Its management appeared to have badly misjudged the depth of Unilever’s attachment to its culture and its pursuit of long-term, “sustainable” growth. Unilever’s outright rejection meant that 3G and Warren Buffett, who was expected to help fund a deal, faced the prospect of going hostile against a revered firm. It was a rare stumble. But the episode doesn’t spell the end of its model. More deals are likely. And Kraft Heinz is already changing how Unilever and other rivals operate.
Times are hard for big consumer companies, once among the world’s…Continue reading
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