On Thursday, February 16, Kraft Heinz made an unexpected $143 billion takeover bid for European consumer goods giant Unilever.

Unilever responded by rejecting the offer. “Unilever rejected the proposal as it sees no merit, either financial or strategic, for Unilever’s shareholders,” the company said. “Unilever does not see the basis for any further discussions.”

Kraft Heinz didn’t take Unilever’s “no” as a flat-out rejection, though. “While Unilever has declined the proposal, we look forward to working to reach agreement on the terms of a transaction,” Kraft Heinz said in a statement.

If Kraft Heinz and Unilever do end up merging, it would be the third largest takeover in history, according to Reuters.

Packaged foods manufacturer Kraft Heinz has seen sales slow because of the increasing desire by U.S. and European consumers to buy food that seems fresher and more natural.

Unilever, too, has seen its European growth slow due to a combination of health-conscious consumers and new companies coming into the market. However, it does have an increasing presence in emerging markets.

In order to deal with that slow growth, Anglo-Dutch Unilever has been doing a lot of acquisitions and trying to move into a higher-end market, having recently acquired cleaning products manufacturer Seventh Generation, air purification company Blueair, and Dollar Shave Club.

U.S.-based Kraft Heinz has responded to changing consumer demands by retooling the famous Kraft macaroni and cheese to remove artificial colors, and by creating a line of frozen dinners designed to appeal to younger buyers through the use of more natural and trendier ingredients.

Euromonitor food analyst Raphael Moreau told The Wall Street Journal that even if Kraft Heinz’s offer is ultimately unsuccessful, it could prompt Unilever to sell some food brands to the company. However, getting approval for such a huge merger could be difficult, he said, so Kraft Heinz may have to settle for buying some of Unilever’s products rather than the entire company.

To give a bit of history, Kraft Heinz was formed by a merger between H.J. Heinz Company and Kraft in 2015. Prior to that, investment companies 3G and Berkshire Hathaway bought H.J. Heinz in 2013. In the current bid for Unilever, Lazard is advising Kraft Heinz, and Unilever is being advised by Centerview Partners, UBS, Morgan Stanley, and Deutsche Bank.

News of the offer raised the value of Unilever’s shares by 13 percent to $46.92 as of 8 a.m. ET Friday. Shares of Kraft Heinz rose 7.3 percent to $93.61, giving it a total market value of about $114 billion.

If Kraft Heinz is able to take over Unilever, the company would be triple-headquartered in the U.S., UK, and Netherlands, but it would be officially domiciled in the U.S. “This is not an inversion,” a Kraft Heinz spokesman said.

In order to proceed with any further acquisition talks, UK Takeover Code rules, Kraft Heinz has until March 17, 2017, to announce a firm intention to make a specific offer. It also has to convince antitrust regulators in at least three countries that the sale is ultimately a good deal for consumers as well as investors. The British and Dutch governments are sure to add their comments to any potential deal, too, although as of February 17, neither had made a statement.

Photo: Gil C / Shutterstock, Inc.

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