Talks between Unilever and Kraft Heinz over a possible merger of parts of their food businesses have ended, according to a report by the Financial Times.
The discussions had explored combining Unilever's food division with Kraft Heinz's condiments unit, a move that could have created a massive new company worth tens of billions of dollars.
The proposed deal would have brought well-known brands like Hellmann's mayonnaise and Heinz ketchup under one roof.
However, people familiar with the matter said the companies have now stopped negotiations as both face weaker demand for packaged foods due to ongoing economic uncertainty.
Neither company gave a public comment when asked about the talks.
The end of the discussions comes at a time when both firms are rethinking their strategies. Unilever is now considering a broader separation of its food business, according to a separate report by Bloomberg News.
According to Reuters, investors appeared uneasy about this possibility, as Unilever's shares dropped 3.5% on Wednesday.
Some worry the company could become "distracted" if it moves forward with a major spin-off.
FT Exclusive: The discussions between the companies in recent months, which have now ended, were over a merger of Unilever’s food business and Kraft Heinz’s condiments division, according to people familiar with the talks. https://t.co/E74mBxXtta pic.twitter.com/yvhe0rhbY1
— Financial Times (@FT) March 18, 2026
Kraft Heinz Drops Breakup Plan
On the other side, Kraft Heinz has already changed its plans. In February, the company decided to stop efforts to split itself into separate parts.
CEO Steve Cahillane said this decision was necessary because of worsening conditions in the food industry.
Instead of breaking up the business, Kraft Heinz is focusing on a $600 million turnaround plan aimed at improving performance.
The company has faced challenges for years, especially after its earlier merger backed by investor Warren Buffett and private equity firm 3G Capital.
Its shares also slipped nearly 4% in extended trading, showing continued concern from investors, US News reported.
Before halting its breakup plan, Kraft Heinz had been looking at separating its slower-growing grocery brands—such as Oscar Mayer and Lunchables—from its faster-growing sauces and spreads division, which includes Heinz ketchup and Philadelphia cream cheese.
The talks with Unilever happened before this strategy shift.
Originally published on vcpost.com
