The Daily Update - Greece / Kraft Heinz and Unilever

Ahead of Eurozone finance ministers meeting today in Brussels to discuss Greece’s progress on achieving its bailout conditions, the head of the Eurozone bailout fund Klaus Regling believes that the southern Mediterranean country will need less in the third instalment of emergency loans from international lenders than originally approved. Speaking to the German newspaper Bild Regling said ‘We already have half of the three-year programme behind us and we've paid out nearly EUR32 billion so far’ however he went on to say ‘By the programme's end in August 2018, we'll likely have paid out significantly less than the agreed highest sum of EUR86 billion.’

Regling comments come as a review of the agreed bailout programme has been affected by arguments and delays between the Greek government and its creditors. The main problem being that at the moment the two sides do not seem to see eye to eye on pension reforms, fiscal targets and debt relief. Even the creditors seem to disagree over how to proceed. The International Monetary Fund is still demanding the Greece further cut pensions, a proposal that the Greek government says is unacceptable, whilst the majority of the EU have rejected the IMF’s demand to award some sort of debt relief. IMF Managing Director Christine Lagarde and German Chancellor Angela Merkel meet on Wednesday to try to find some sort of middle ground.

Also the big news over the weekend was that Kraft Heinz walked away from its ‘friendly’ bid for rival Unilever, saying that the negative response to announcement made a friendly merger impossible. According to sources Kraft had not expected to encounter such resistance from its larger rival, as a Kraft spokesman said ‘Kraft Heinz’s interest was made public at an extremely early stage’ adding ‘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.’

One person who will be relieved by the news is UK Prime Minister Theresa May, who had already said the government would investigate if the proposed deal had any negative effects on the UK economic interests. During her campaign to become the Prime Minister, May argued that governments should be much more active in vetting proposed foreign takeovers of UK companies, indeed singling out Kraft Heinz’s takeover of Cadbury in 2010 as the type of deal that should have been blocked.