Mondelez takeover speculation lifts shares as Kraft walks from Unilever
Shares of Mondelez (MDLZ) are on the rise following a news report saying that the company could re-emerge as a takeover target after Kraft Heinz (KHC) withdrew its bid to acquire Unilever (UL, UN). Meanwhile presenting at a conference in Florida, the maker of Oreo cookies and Triscuits reaffirmed its 2017 outlook and talked about its new product line called Vea. MONDELEZ COULD BE NEXT TARGET: Over the weekend, Unilever and Kraft Heinz announced in a joint statement that the latter has "amicably agreed to withdraw its proposal for a combination of the two companies." The press release added, "Unilever and Kraft Heinz hold each other in high regard. Kraft Heinz has the utmost respect for the culture, strategy and leadership of Unilever." This comes just days after Kraft Heinz, which is partly owned by 3G Capital Partners and Warren Buffet's Berkshire Hathaway (BRK.A, BRK.B), confirmed that it was working on a deal to try to acquire Unilever. Speculating on what the bid withdrawal news could mean for Kraft Heinz and its part owners 3G and Berkshire, the Financial Times argued that the Brazilian investment firm could set its sights on Mondelez. 3G Capital, which frequently invests alongside Warren Buffett, has up to $15B to deploy on its next megadeal and is said to be determined to identify and execute a major takeover soon, sources told the publication. Among other possible targets mentioned in the article were General Mills (GIS), Kellogg (K), Campbell Soup (CPB), Colgate-Palmolive (CL), Kimberly-Clark (KMB) and Clorox (CLX). OUTLOOK, NEW PRODUCTS: Presenting at the Consumer Analyst Group of New York annual conference in Florida, Mondelez reaffirmed its 2017 and 2018 adjusted operating income margin of 16%, and provided an estimate for 2017 free cash flow of approximately $2B. In addition, the company reaffirmed other elements of its 2017 outlook, including organic net revenue growth of at least 1%, adjusted operating income margin in the mid-16% range, and double-digit adjusted earnings per share growth on a constant-currency basis. Mondelez also talked about new products, namely its new line of crackers and snack bars "Vea" made without artificial ingredients and GMOs. The Vea products are expected to reach shelves across the U.S. in July. Further, the maker of Oreo cookies said it is revamping some of its existing products to better appeal to millennials. WHAT'S NOTABLE: Last year, Mondelez made a failed bid for Hershey (HSY), with the proposed merger seen by some as a defensive move, with the Oreo cookies maker trying to make itself less of a takeover target. Last summer, the U.S. chocolate company turned down Mondelez's $23B cash and stock offer. PRICE ACTION: In late morning trading, shares of Mondelez have gained over 4% to $44.36. Over the last twelve months, Mondelez shares have advanced over 11%.