DEERFIELD, Ill., and HERSHEY, Pa. -- In what would be a “blockbuster deal uniting two of the world’s best-known candy makers,” but which could spark antitrust concerns, snack maker Mondelez International Inc. made a bid to buy chocolate maker Hershey Co., reported The Wall Street Journal.
- UPDATE: Hershey has rejected Mondelez's takeover bid. Click here for details.
As reported in a McLane/CSP Daily News Flash, Mondelēz recently sent a letter to Hershey proposing the combination, according to people familiar with the matter. The companies did not disclose the terms of a potential deal. Hershey and Mondelēz have market values of $21 billion and $69 billion, respectively.
Any sort of deal would be contingent on the approval of the Hershey Trust, which holds 8.4% of the company’s common stock and 81% of its voting power. The trust has been opposed to selling the company in the past, said the Journal. In 2002, the trust rejected a proposal to seek a sale.
Mondelēz is pledging to protect jobs following a merger of the companies, locate its global chocolate headquarters in Hershey, Pa., and rename the company Hershey, according to one of the people.
U.S. antitrust regulators could prove another hurdle, said a Food Dive report. Hershey's U.S. market share was at about 44% as of last year, and Mondelez, which generates about 30% of its global sales from chocolate, owns major chocolate brands such as Cadbury; however, almost 75% of Mondelez's business is concentrated outside of North America, so a potential Hershey takeover may not raise many antitrust concerns, while also strengthening Mondelez's presence stateside, it 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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