Unilever has turn down a $143 billion merger deal from Kraft Heinz in what would have been one of the biggest deals ever.
Unilever declined the offer, saying in a statement "fundamentally undervalues" the company.
"Unilever rejected the proposal as it sees no merit, either financial or strategic, for Unilever's shareholders. Unilever does not see the basis for any further discussions," the statement said.
"While Unilever has declined the proposal, we look forward to working to reach agreement on the terms of a transaction," Kraft said in a statement. "[But] there can be no certainty that any further formal proposal will be made to the Board of Unilever or that an offer will be made at all."
Kraft is backed by Brazilian private equity firm 3G Capital and Warren Buffett. Two years ago, H.J. Heinz, owned by Buffett's Berkshire Hathaway and 3G, announced a $45 billion takeover of Kraft Foods.
A Kraft deal with Unilever would add Hellmann's mayonnaise, Ben & Jerry's ice cream and Knorr soups to a portfolio that includes Heinz ketchup and Kraft Macaroni & Cheese.
In its statement, Unilever said the deal put an 18 percent premium on Unilever's share price, the main area where the company claimed it was undervalued.
The premium would essentially become a food multiple for Unilever shareholders. On paper, the company looks more like a packaged goods distributor than a food producer, with only roughly 38 percent of Unilever's EBITDA, or earnings before interest, tax, depreciation and amortization, coming from its food products.
Pablo Zuanic, senior equity analyst at Susquehanna International Group, said that if the deal goes through, Unilever may have to spin off its household products business, which includes brands like Dove and Axe, to make it worthwhile.
"We expect them to divest or sell the household personal care business, otherwise the deal is not doable based on the math," Zuanic said on Friday. "Even with 25 percent equity, you have to divest the HPC business to end up north of five times net EBITDA."
"Kraft Heinz ... their focus is to be a global powerhouse in food and beverage, not [in] HPC, so ... Unilever, on the food, which is what they will keep, is aligned with a global strategy," he continued.
On Friday, Consumer Edge Research's Jonathan Feeney said that Kraft's posturing is a traditional response to initial merger disagreements.
"It certainly sounds like a typical opening salvo of a merger approach," the consumer staples analyst told CNBC's "Squawk Box." "It's hard to tell at this point what's actually friendly and unfriendly. Often times it's standard procedure."
But the deal would undoubtedly be a key strategic play for Kraft Heinz because it would broaden the company's international scope, he said.