Kraft withdraws offer to merge with Unilever

US food company Kraft Heinz  withdrew its proposal for a $US143 billion ($186 billion) merger with larger rival Unilever, the companies said on Sunday (US time), raising questions about whether Kraft could turn its focus to another target.

Kraft had made a surprise offer for Unilever to build a global consumer goods behemoth that was flatly rejected by Unilever, the maker of Lipton tea and Dove soap.

Kraft withdrew its offer because it felt it was too difficult to negotiate a deal following the public disclosure of its bid so early after its approach to Unilever, according to people familiar with the matter who requested anonymity to discuss confidential deliberations.

Kraft had not expected to encounter the resistance it received from Unilever, one of the people said. Some key concerns raised during talks included potential UK government scrutiny, as well as differences between the companies’ cultures and business models, the person added.