There are rumours that Kraft Heinz will target Danone after it failed to acquire Unilever. However, analysts feel the water between both companies may still be too deep.
Plenty of potential
Kraft Heinz’ shareholders are pressuring the company to acquire yet another company, because they want short-term profit spikes and that includes acquisitions. The goal was to obtain Unilever, but seeing how that deal fell through, the American company is now rumoured to be targeting French Danone.
The acquisition would fit Kraft Heinz’ strategy entirely: the French dairy manufacturer has several major brands which are popular in growth markets and its addition would create further international expansion for Kraft Heinz. The move would also create cost-cutting synergies, something the company often examines and executes when it acquires other companies.
But also plenty of problems
Undoubtedly, several issues will once again surface as is usually the case when an American company tries to acquire a famous French company. That will especially be the case when the buyer is known to cut jobs after acquisitions. Danone will indubitably make some demands Kraft would not be too pleased with, like job security, seats on the board and a large stake in the new company. Kraft Heinz will also have to make guarantees regarding Danone’s product range, which will have to remain healthy and sustainable.
Analysts assume that the possible negotiations will be a lot harder than with Unilever and those also turned out to be a dud.