Mondelez Ends Pursuit of Hershey

Oreo cookie maker Mondelez International Inc. ended its pursuit of Hershey Co. after the famed chocolatier rebuffed its latest acquisition offer, putting an end to a months long takeover campaign that would have created the world’s largest candy company.
 
Hershey last week rebuffed a new bid by Mondelez, the second one since June, and indicated it would be difficult to strike a deal before next year because of the shifting dynamics at its controlling shareholder, the Hershey Trust Co., according to people familiar with the matter.
 
Mondelez said in a statement late Monday there was “no actionable path forward” to buy Hershey, which confirmed that there were additional communications with Mondelez but wouldn’t comment further.
 
Mondelez’s failure to pull off the takeover, which would likely have been valued at upward of $25 billion, will likely reinforce the notion among analysts and investors that Hershey is unattainable as an acquisition target in light of its majority ownership by a trust that for years has been reluctant to sell.
 
The Hershey Trust, which controls about 81 percent of Hershey’s shareholder votes, is in the midst of overhauling its own board of directors following an investigation by state regulators, and investors had wondered if Mondelez would be able to win its approval by striking during a period of uncertainty.
 
Mondelez Chief Executive Irene Rosenfeld walked away from her goal of creating a snacking and confectionary giant that would benefit from giant global scale and the combination of major brands like Chips Ahoy and Reese’s peanut butter cups.
 
Hershey’s stock dropped 12% after market hours Monday while shares of Mondelez rose 3.4%.
 
Mondelez initially made a roughly $23 billion bid for Hershey, The Wall Street Journal first reported in June. Hershey rejected the offer, which amounted to $107 a share, half in cash and half in stock.