By Ben Dummett 

Kraft Heinz Co.'s $143 billion unsolicited bid for Anglo-Dutch rival Unilever PLC took investors by surprise, but the identity of advisers working on the megadeal likely didn't.

Lazard is advising Kraft Heinz while Centerview Partners is part of a group of banks in Unilever's corner.

Based on past relationships with the two consumer behemoths and a proven knowledge of the sector, both advisers look like they were shoo-ins.

Companies often use the same investment banking firms or particular bankers who they have worked with on previous deals because of their intimate knowledge of a firm's corporate strategy. Targets of hostile attempts may also use banks that had previously worked with the bidder to take advantage of their familiarity with the aggressor to help mount a defense. Both trends are evident in the Kraft Heinz-Unilever case. Lazard and Centerview have worked on past deals involving the Pittsburgh- and Chicago-based Kraft Heinz or its predecessor companies. Centerview, meanwhile, knows Unilever as it worked with the London- and Rotterdam-based company on its $1 billion deal last year to acquire Dollar Shave Club, the mail-order service for disposable razors and other grooming products.

Lazard's relationship with Kraft Heinz, which is known for such household brands as Oscar Mayer and Heinz ketchup, can be traced back to 2009-2010 when the investment bank worked with its predecessor company Kraft on its GBP9.9 billion ($12.29 billion) acquisition of Cadbury PLC, the U.K. chocolate maker. That deal came under scrutiny at the time after U.K. regulators accused Kraft of reneging on its promise to keep a factory open.

That said, Lazard's relationship with 3G Capital Partners, the Brazilian private-equity firm tied closely to famed investor Warren Buffett, appears to be a big part of its current mandate to help Kraft Heinz win over Unilever. The global investment bank, whose roots date back to the 1840s as a dry goods merchant in New Orleans, helped 3G and Mr. Buffett's Berkshire Hathaway Inc. in 2013 acquire H.J. Heinz for $23 billion. That deal helped 3G establish a platform for future food industry acquisitions that would take advantage of its focus on cutting excess costs of targets to boost returns. About two years later, Lazard advised Heinz on its merger with Kraft.

Now, Kraft Heinz is betting Lazard can help it complete what would be the second-largest international deal in history after Vodafone Group PLC's $172 billion acquisition in 1999 of Mannesmann, according to Dealogic. Lazard has proven it can do complex, global deals, advising Anheuser-Busch InBev NV on its $100 billion-plus takeover of rival brewer SABMiller PLC. It is also an adviser to Reynolds American Inc. on its planned deal announced earlier this year to be acquired by British American Tobacco PLC for $49 billion.

Still, the Unilever transaction is far from certain. On Friday, the consumer giant, behind brands such as Dove soap and Ben & Jerry's ice cream, rejected the offer. And any agreement would come under close scrutiny by antitrust regulators, as well as by governments in the U.K. and elsewhere, worried about potential job losses resulting from a deal.

From Lazard, Kraft Heinz is relying on William Rucker, the investment bank's chief executive in London, and Will Lawes, who joined the firm in January to advise the biggest public companies listed on the London Stock Exchange. Mr. Lawes was previously executive chairman at Freshfields Bruckhaus Deringer, a global law firm.

Sitting across the table, if the two sides get that far, will be Unilever's bankers from a group of firms including Centerview Partners that also know Kraft Heinz's predecessor companies. Centerview, considered among the premier boutique investment banks, advised Heinz on 3G's takeover bid for the consumer company in 2013 and then worked with Kraft when it announced its merger with Heinz in 2015. It also had an advisory role to SABMiller in its deal with AB InBev and to BAT in the Reynolds transaction.

Centerview bankers working with Unilever include Nick Reid, who also worked as an adviser to BAT on the Reynolds deal. Unilever's other bankers include Morgan Stanley, one of the advisers to Mead Johnson Nutrition Co. on its deal announced this month to be acquired by Reckitt Benckiser Group PLC, UBS, an adviser to BAT on the Reynolds deal, and Deutsche Bank, who was also adviser to BAT on the Reynolds deal and to Reckitt on the Mead transaction.

Write to Ben Dummett at ben.dummett@wsj.com

 

(END) Dow Jones Newswires

February 19, 2017 08:33 ET (13:33 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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