Hershey Rejects $23 Billion Takeover Bid
CBJ — Hershey Co has rejected a US$23 billion offer by Mondelez that would seek to expand the latter’s U.S. footprint and create the world’s largest confectioner.
The snub underscores the challenges Mondelez faces in satisfying Hershey’s controlling shareholder, the Hershey Trust, a $12 billion endowment created by the eponymous company’s founder a century ago.
“The board of directors of the company unanimously rejected the indication of interest and determined that it provided no basis for further discussion between Mondelez and the company,” Hershey said in a statement.
A merger of two of the world’s top five candy makers would bring Hershey’s strong U.S. business to Mondelez’s global footprint. The combined company would leapfrog Mars Inc, which has 13.3 per cent of the global market, according to data firm Euromonitor International.
The combination would give Oreos cookies maker Mondelez control over the production and distribution of its Cadbury brand chocolates in the United States, which Hershey currently holds the license to produce, paying royalties to Mondelez.
It would also give Mondelez the U.S. production and distribution rights for Kit Kat, one of the most popular chocolate brands in the world, which industry sources said would be a significant boost to Mondelez as a result of the deal.
Nestle manufactures Kit Kat worldwide, but Hershey has the rights in the United States, paying Nestle royalties from sales.