The Canadian Radio-television and Telecommunications Commission (CRTC) on Thursday issued a directive to that effect to all wireless service providers.

The alert system would allow emergency management officials to warn Canadians via mobile devices of “dangers to life and property.”

The alerts would go to mobile phones and other mobile devices connected to LTE (long-term evolution) networks, which are available to over 97 per cent of Canadians, the CRTC said.

Messages would be issued by federal, provincial and territorial governments and emergency management officials to warn the public of “imminent threats” such as fires, tornadoes, floods, water contamination and Amber alerts, the CRTC said.

Service providers are expected to work with their federal, provincial and territorial counterparts to develop an awareness campaign and a test schedule.

The CRTC’s interconnection steering committee network technology working group is expected to file a progress report by July 5 and a final report by Oct. 3, 2017, on a proposed awareness campaign and test schedule.

The exact launch date for the distribution of alerts would be announced once “all required functionalities are in place,” the commission said.

Requiring “pre-LTE” networks such as 2G and 3G to carry alerts would increase deployment costs and delay deployment of wireless alerts, the CRTC said, while exempting pre-LTE networks would have “minimal impact” on alert coverage.

Canadians getting alerts via mobile devices would hear the same alert tone as they now do via radio and TV, and receive a “unique vibration cadence” when an alert is issued.

The CRTC has required since 2014 that AM, FM and over-the-air TV stations and “subscription-based” service providers must broadcast emergency alert messages. — AGCanada.com Network

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Kraft had made a surprise offer for Unilever to build a global consumer goods behemoth — an offer flatly rejected on Friday by London- and Rotterdam-based Unilever, whose food brands in Canada include Becel margarine, Ben and Jerry’s ice cream, Knorr soups, Lipton tea and Hellmann’s mayonnaise.

Kraft withdrew its offer because it felt it was too difficult to negotiate a deal following the public disclosure of its bid so soon after its approach to Unilever, according to people familiar with the matter who requested anonymity to discuss confidential deliberations.

Kraft had not expected to encounter the resistance it received from Unilever, one of the people said. Some key concerns raised during talks included potential U.K. government scrutiny, as well as differences between the companies’ cultures and business models, the person added.

“Kraft Heinz’s interest was made public at an extremely early stage,” Kraft Heinz spokesman Michael Mullen said in a statement. “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.”

Kraft was forced to publicly disclose its offer on Friday to comply with Britain’s takeover regulations, after rumours of its approach to Unilever circulated among stock traders.

Under U.K. takeover rules, Kraft’s public withdrawal of its offer precludes it from reviving takeover talks with Unilever for six months.

A combination would be the third-biggest takeover in history and the largest acquisition of a U.K.-based company, according to Thomson Reuters data. The combined entity would have US$82 billion in sales.

The premature exposure of Kraft’s bid left the aggressive acquisition machine scrambling to craft an appetizing message for shareholders, the press, Unilever’s rank and file, and British and Dutch leaders.

Prime Minister Theresa May ordered top officials to investigate if the proposed deal posed potential threats to British economic interests, the Financial Times reported.

May has been adamant the government should be more active in vetting proposed foreign acquisitions of U.K. companies. She had previously singled out Kraft’s 2010 acquisition of another British household name, Cadbury, as an example of a deal that should have been blocked.

A deal for Unilever would have marked the next instalment of Brazilian private equity firm 3G Capital Management’s longstanding strategy of buying food companies and slashing costs.

In 2013, 3G teamed up with billionaire investor Warren Buffett to acquire Heinz and then purchased Kraft two years later. It is now the second-largest shareholder in Kraft, behind Buffett’s Berkshire Hathaway.

Unilever feared that a merger with Kraft, under 3G Capital’s relentless cost-cutting, risked eroding the value of its brands and could impede its expansion in emerging markets, which requires more investment, according to people familiar with the company’s thinking.

Unilever also saw its household products and consumer care divisions as too distinct from Kraft’s food business, the people added.

3G made its name in corporate America by orchestrating large debt-laden acquisitions and then slashing costs dramatically to juice profits. Using a strategy called zero-based budgeting, its managers must justify all expenses, from pencils to forklifts.

Kraft still hungry?

The breakdown in deal talks sparked speculation among analysts and investors about whether Kraft might attempt to purchase another large consumer goods company as a backup plan.

“We believe this announcement serves as a reminder — if needed — of (Kraft’s) interest, capacity, and commitment to pursuing large-scale M+A in a potentially near-term time horizon,” said Barclays analyst Andrew Lazar in a note.

Its bid for Unilever, where more than 60 per cent of sales come from home and personal care products, signals a willingness to make big buys outside of its historic area of focus — food — said Sanford Bernstein analyst Ali Dibadj.

He cited Colgate-Palmolive as one potential target, noting that its stock popped four per cent Friday on news that Kraft was eyeing Unilever.

However, the breakdown of the Unilever talks means that some food companies that have long been speculated as potential targets for Kraft, such as Mondelez, are still very much on the table, said an industry banker, who declined to be named because he was not authorized to speak to the press.

Low interest rates and cheap debt have fuelled big cross-border deals, marking the busiest start to the year for M+A activity on record. The bid also reflected a broader interest in UK companies as acquisition targets, in part due to the British pound, which has been under pressure since Britain announced plans to withdraw from the European Union.

Labour union representatives expressed relief that the deal talks broke down, citing concern about its potential effect on jobs and consumers.

“How many scares must the government put U.K. workers through before they actually do as they have promised, which is to make the takeover process socially responsible?” said Len McCluskey, general secretary at Unite, Britain’s largest union.

— Carl O’Donnell reports on mergers and acquisitions for Reuters from New York. Reporting for Reuters by Ismail Shakil in Bangalore, Pamela Barbaglia in London and Lauren Hirsch and Greg Roumeliotis in New York.

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Nestle chairman Peter Brabeck-Lemathe told the company’s annual shareholder meeting the creation of Kraft Heinz Co. and Jacobs Douwe Egberts, as well as “spectacular” growth of some other companies in developing markets, required two things of Nestle in order to remain the global leader.

“First of all, an acceleration in our policy of adjusting our portfolio of activities and at the same time better use of our size,” Brabeck said.

Nestle, the world’s biggest food group by sales, has already taken steps toward both of those goals. It has sold underperforming businesses including PowerBar and the bulk of Jenny Craig, and created a new executive board role to oversee several corporate support functions globally. The move was aimed at making the most of its scale.

In Canada, Nestle’s business includes 21 processing plants, distribution centres and sales offices across the country, with brands in pet foods, baby foods, frozen pizzas and desserts, prepared meals, coffee and chocolate.

Nestle’s acquisitions in recent years have included Kraft’s Delissio frozen pizza business in Canada and the U.S., the Gerber line of baby foods and, in 2012, Pfizer’s infant-nutrition product lines, such as Materna vitamins.

Brabeck’s comments come three weeks after the announcement that H.J. Heinz agreed to buy Kraft Foods, backed by Warren Buffett’s Berkshire Hathaway and private equity firm 3G Capital, creating the third-largest packaged food company in North America.

“Ruthless”

“3G and Buffett have pulverized the food industry market, particularly in America with serial acquisitions,” Brabeck said. “3G’s partners are known in our industry for ruthless cost-cutting and have already proven numerous times that they are capable of reducing operating costs in particular by between 500 and 800 basis points, which has a revolutionary impact on all the other members of the industry.”

A spokesman for 3G declined to comment on the remarks.

3G’s founders orchestrated the formation of Anheuser-Busch InBev, and the takeovers of Burger King, Tim Hortons and Heinz.

European coffee company D.E. Master Blenders is in the process of forming a joint venture with the coffee business of Mondelez International. The combined company will be the world’s largest standalone coffee company, though it will still be far behind Nestle’s coffee business.

Brabeck also voiced support for the Swiss National Bank’s recent currency move, saying the stronger Swiss franc would aid Swiss competitiveness in the long run by encouraging innovation. He also dismissed the possibility of Nestle moving to report in any other currency.

“I’ve often said that for as long as the Swiss flag flies over our corporate buildings, Nestle will stick with the Swiss franc,” he added.

— Martinne Geller is a Reuters correspondent covering the European consumer goods sector from London. Includes files from AGCanada.com Network staff.

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Shares of Kraft — which operates 35 plants in Canada, the U.S. and Puerto Rico — were up more than 38 per cent near $85 in morning trading (all figures US$).

The deal would provide Heinz with access to Kraft brands, which it says are in 98 per cent of North American households and include well-known names like Oscar Mayer and Jell-O.

The international presence of Heinz, whose Canadian holdings include two processing plants in Ontario, provides an opportunity to sell Kraft’s brands overseas.

Kraft stockholders would get one share in the combined company, to be called the Kraft Heinz Co., and a special cash dividend of $16.50 for every share held.

Heinz shareholders will own 51 per cent of the combined company and Kraft shareholders the rest.

Packaged-food makers such as Kraft are battling sluggish demand as consumers shift to products perceived to be healthier.

Kraft has overhauled its senior management over the past few months and has said it will develop products to meet changing consumer preferences.

However, “the board saw the 3G opportunity as more compelling,” Kraft CEO John Cahill, who will be vice-chairman of the combined company, said on a conference call.

The combined publicly traded company is expected to save about $1.5 billion in annual costs by the end of 2017. It will have eight brands worth over $1 billion each, the companies said.

Kraft Heinz will be led by Heinz CEO Bernardo Hees and have revenue of about $28 billion, about half that of market leader PepsiCo in 2014.

Berkshire Hathaway will own more than 320 million shares in the combined company, which will have about 1.22 billion shares outstanding, Buffett told CNBC.

“We will be in the stock forever,” he said.

Brazilian private equity firm 3G Capital and Berkshire Hathaway acquired Heinz for $23.2 billion in 2013.

The Kraft deal is unlikely to face antitrust hurdles as there is little overlap in products, analysts said.

Kraft’s products include cheese, processed meats, packaged meals and Maxwell House coffee, while Heinz makes ketchup, sauces and frozen foods.

Kraft is 3G Capital’s fifth major deal in the food and beverage industry since 2008, when it engineered a takeover of Anheuser-Busch by brewer InBev.

3G Capital also controls Restaurant Brands International, formed when its Burger King business bought Canadian coffee and donut chain Tim Hortons.

— Sruthi Ramakrishnan and Anjali Athavaley report for Reuters from Bangalore and New York City respectively. Writing for Reuters by Lisa Von Ahn.

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