HERSHEY, Pa. -- The Hershey Co. has confirmed that it has received a bid from Mondelēz International Inc. to acquire Hershey and that it has rejected the approximately $23 billion offer.
Hershey said that snack maker Mondelēz made a preliminary, nonbinding indication of interest to acquire the candy maker for a mix of cash and stock consideration, totaling $107 a share of Hershey common stock.
Mondelēz recently sent a letter to Hershey proposing the combination, people familiar with the matter told The Wall Street Journal on June 30.
In its offer, Mondelēz pledged to protect jobs, locate its global chocolate headquarters in Hershey, Pa., and rename the company Hershey, according to one of the sources.
The Hershey board said it carefully evaluated the indication of interest and unanimously rejected it after receiving input from management and outside financial and legal advisers. Following this review, the board said it has “determined that it provided no basis for further discussion between Mondelēz” and Hershey.
“The company’s board of directors and management team are committed to enhancing value for all stockholders in accordance with the company’s strategic plan,” Hershey said.
The bid could cause other companies to make a play for Hershey, the Journal said, citing Nestlé SA as one possibility. The Swiss food company already licenses the KitKat brand to Hershey in the United States. Nestlé has the right to reclaim control of the chocolate-covered wafer treat if someone else buys Hershey—at no cost, which could diminish Hershey’s value to Mondelez by $3 billion, according to a person familiar with the matter.
Nestlé, however, could have greater U.S. antitrust issues than Mondelēz if it were to try to buy Hershey, the report said.
Deerfield, Ill.-based Mondelēz International is a global snacking company with 2015 net revenues of approximately $30 billion. It is a world leader in biscuits, chocolate, gum, candy and powdered beverages, with billion-dollar brands such as Oreo, LU and Nabisco biscuits; Cadbury, Cadbury Dairy Milk and Milka chocolate; and Trident gum. In 2012, Kraft Foods Inc. renamed itself Mondelēz after spinning off its North American grocery business.
The Hershey Co., based in Hershey, Pa., is a global confectionery company with more than 80 brands that drive more than $7.4 billion in annual revenues, including Hershey’s, Reese’s, Hershey’s Kisses, Jolly Rancher, Ice Breakers and Brookside, as well as SoFit.
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