The companies said Sunday in a joint press release that Kraft Heinz has "amicably" abandoned the offer.
Shares in Unilever slumped 6.5 percent on Monday to 41.91 euros in Amsterdam, one of the places they're listed. They'd jumped 14 per cent on Friday.
The deal would have combined Kraft Heinz products such as Oscar Mayer, Jell-O and Velveeta with Unilever's stable of brands, which include food as well as other consumer goods like Dove soap and Vaseline. The merged company would have rivaled Nestle as the world's biggest packaged food maker by sales.
Unilever, which has a head office in London and multiple stock listings, rejected the offer on Friday, but despite that, Kraft Heinz said at the time that it was still interested in the deal.
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Such acquisitions might not lead to big changes that customers would notice on supermarket shelves, but shifting tastes are partly driving deal-making in the food industry.
"That obviously has its limits," said David Garfield, head of the consumer products unit at consulting firm AlixPartners, said last week.
Instead, major packaged food companies are being forced to dig deeper to find cost efficiencies or tap into new markets, Garfield said. That can include mergers that result in consolidated manufacturing systems, or that give companies access to distribution networks in regions of the world where they don't have a big presence.
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