Mondelez shares dropped 5 per cent in early trading on Friday after Kraft Heinz’s approach for Unilever lessened the odds that the US group would be an acquisition target.
Speculation of a potential take-over by Kraft of Mondelez was a “key factor supporting multiples for the group at such a high level,” said Stifel Nicolaus analyst Christopher Growe.
“While this potential transaction (between Kraft and Unilever) does not count out a future acquisition … it certainly delays the potential at least a couple years,” he said.
Mondelez trades at 20.6 times expected earnings over the next 12 months, a premium to 19.9 times for the S&P 500 food products industry group, and 18.1 times for the broader S&P 500, according to Bloomberg data.
Mr Growe added that Kellogg, General Mills and Campbell Soup — all of which compete in the same sector — could also come under pressure as investors mull over the potential Kraft-Unilever deal.
Kellogg was down 1.9 per cent in pre-market trading, while Campbell Soup shed 1.8 per cent. General Mills suffered a steeper fall of 4.6 per cent after it issued a profit warning.
Kraft said early on Friday that it had made a $143bn takeover offer for Unilever, which would place it among the biggest deals in corporate history and would have significant ramifications for the sector.
Follow Arabian Post
Select Arabian Post as your preferred source on Google and MSN News for trusted business news and Arab politics and updates.
