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Unilever initially rejected the takeover offer by Kraft Heinz. Reuters

Kraft Heinz has decided to pull out of its proposed takeover bid of Unilever. The proposed £115bn deal would have been one of the biggest deals in corporate history had it gone through.

Unilever initially rejected the offer made by the US company on Friday (17 February), saying that the offer had "no merit, strategic or financial."

Instead of coming back to the table with an improved and more enticing offer, the two companies issued a surprise joint statement on Sunday (19 February) saying that no deal would go ahead.

In a two paragraph statement, the companies said: "Unilever and Kraft Heinz hereby announce that Kraft Heinz has amicably agreed to withdraw its proposal for a combination of the two companies.

"Unilever and Kraft Heinz hold each other in high regard. Kraft Heinz has the utmost respect for the culture, strategy and leadership of Unilever."

The proposed takeover was said to be backed by Warren Buffett and the Brazilian private equity group 3G Capital. The Times said that Buffett and Jorge Paulo Lemann, one of 3G's founders, had approached Paul Polman, Unilever's boss a week earlier on the offer.

The Guardian said the strong opposition to the merger proposal resulted in Kraft backing away from pursuing the takeover over the weekend.

A Kraft Heinz spokesperson told the newspaper: "[Our] interest was made public at an extremely early stage. Our intention was to proceed on a friendly basis, but it was made clear Unilever did not wish to pursue a transaction.

"It is best to step away early so both companies can focus on their own independent plans to generate value. We remain focused on driving long-term value while always putting our consumers first," the spokesperson said.

A senior source working on the Anglo-Dutch company's defence told The Times: "They are fundamentally different to us. We invest in brands to generate growth. They strip out costs and let the brands decline."

Unilever, which is headquartered in both London and Rotterdam, has 7,000 employees in the UK and Ireland.

The UK's largest union, United, welcomed news of the decision not to press ahead with the takeover.

A United spokesman told the paper that while it was pleased over the latest turn of events, he said there was a need to reform takeover rules. "It shows the need for a 'Cadbury rule' which takes into account the issues like jobs and consumers in these circumstances, so it's not jsut down to how deep someone's pockets are, to throw money at shareholders."

The Cadbury rule refers to the rather controversial £11.5bn takeover of Cadbury by Kraft in 2010. Despite promises to save factories, they were not kept and the firm was spun off to form a separate company Mondelez.

A source close to the bid had earlier told the newspaper that that had the merger gone through, there would be stringent cost-cutting and "synergies" that would involve job losses.