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Kraft Heinz Withdraws $143 Billion Bid to Buy Unilever

NEW YORK — Kraft Heinz has withdrawn its $143 billion offer to buy Unilever, backing away after Unilever rejected the bid as too low.

The companies announced the decision Sunday in a joint press release, saying that Kraft Heinz has "amicably" withdrawn the offer.

Analysts say Kraft Heinz, co-headquartered in Chicago and Pittsburgh, is still in the market for acquisitions. The fact that it bid for all of Unilever and not just its food business indicates that Kraft Heinz is potentially open to acquiring other packaged consumer goods, one analyst said.

Related: Kraft and Heinz Merge to Form World’s Fifth-Largest Food Company

Image: Margarine on the packaging line at a Unilever factory
Margarine sits on the packaging line at a Unilever factory in Rotterdam on June 05, 2015. John Thys / AFP - Getty Images, file

Unilever, which has a head office in London, also has a stable of personal care brands such as Dove soap. Unilever rejected the offer last week, but despite that, ketchup, cheese and lunch meat maker Kraft Heinz said at the time that it was still interested in the deal.

The combination would have brought together Kraft Heinz brands such as Oscar Mayer, Jell-O and Velveeta and Unilever's Hellman's, Lipton and Knorr. The combined company would have rivaled Nestle as the world's biggest packaged food maker by sales.

Such acquisitions might not lead to big changes that customers would notice on supermarket shelves, but shifting tastes are partly driving deal-making in the food industry.

Related: Kraft Mac & Cheese Says Goodbye to The Dye

Part of the challenge is the proliferation of smaller food makers marketing products that seem more wholesome, which makes it harder for the established companies to drive up sales simply by selling more of their well-known products or by raising prices, as they have in the past.

"That obviously has its limits," said David Garfield, head of the consumer products unit at consulting firm AlixPartners, said last week.

Instead, major packaged food companies are being forced to dig deeper to find cost efficiencies or tap into new markets, Garfield said. That can include mergers that result in consolidated manufacturing systems, or that give companies access to distribution networks in regions of the world where they don't have a big presence.