Mondelez International, the maker of Oreo and Cadbury, is reportedly considering a massive takeover bid for rival Hershey Company. The potential deal would create one of the world’s largest candy companies. Shares of Hershey rose 15% in midday trading on Monday after Bloomberg reported that preliminary discussions between the two companies had begun. Mondelez has approached Hershey before, but no certainty exists that talks will lead to a deal.
A combined Mondelez and Hershey would unite two major confectionery brands alongside grocery staples like Oreo, Cadbury, Chips Ahoy, and Ritz Crackers for Mondelez, and KitKats, Reese’s, Jolly Rancher, and SkinnyPop Popcorn for Hershey. This deal comes as health-conscious consumers cut back on unhealthy snacks amid high inflation.
Hershey’s stock had plummeted 10% this year before the report, making it an attractive target for acquisition. Randal Kenworthy, a consumer expert at West Monroe, said Mondelez sees Hershey as a “compelling opportunity” due to its strong operational capabilities and brands. The deal would also give Mondelez more purchasing power in the cocoa market and enhance access to the US and European markets.
However, this is not the first time Mondelez has approached Hershey. In 2016, the company rejected a $23 billion bid from Mondelez. Any future offers must be approved by the Hershey Trust, which owns most of the company’s votes and has been hesitant to sell.
Source: https://edition.cnn.com/2024/12/09/food/hershey-mondelez/index.html