Unilever has turned down a takeover offer from food giant Kraft Heinz.

However, the Heinz ketchup maker indicated it would continue working towards striking a deal.

Shares in Anglo-Dutch giant Unilever surged more than 11% in London, but the company said it saw “no merit, either financial or strategic” in the bid.

The deal would be one of the biggest in corporate history, with Unilever currently valued at more than $125 billion.

Unilever, which makes Marmite, Ben & Jerry’s ice cream, Dove soap, and Hellmann’s mayonnaise, said the offer from Kraft “fundamentally undervalued” the company.

“Unilever does not see the basis for any further discussions,” it added.

Kraft Heinz said it had made “a comprehensive proposal” and looked “forward to working to reach agreement on the terms of a transaction”.

Unilever clashed with UK supermarket Tesco in October over its attempts to raise prices to compensate for the steep drop in the value of the pound.

Kraft’s offer was at an 18% premium to Unilever’s closing share price on February 17, Unilever said.

Analysts said Kraft was likely to return for another offer for Unilever, one of the biggest companies on the UK’s FTSE 100 share index.

Warren Buffett and Brazilian private equity company 3G are major investors in Kraft, which also makes Philadelphia cheese and Heinz baked beans.

Kraft merged with Heinz in 2015 to create one of America’s biggest food companies.