Hershey Rejects US$23 bn Takeover Bid by Mondelez

Published By : 01 Jul 2016 | Published By : QYRESEARCH

The global confectionary industry has witnessed a number of significant developments in the recent past on account of labour strikes and production issues. However, the biggest news has been the acquisition bid for Hershey by Modelez International. The Pennsylvania-based Hershey Company is one of the major players in the global confectionary industry. On the other hand, Mondelez International is a global snack food giant. If the deal would have seen the light of the day, it would have been the merger of two industry giants. Mondelez International owns brands such as Nabisco, Cadbury, and others. The company has a market value worth US$69 bn. Hershey’s sales are mainly in the U.S. and are worth US$10 bn.

Hershey has Rejected Bids from Nestlé and Wrigley in the Past

Though Mondelez has emerged as the second largest confectionary manufacturer worldwide, the company is yet to expand its presence across the U.S. The U.S. is the world’s largest market for chocolates. As a result, it has been a strategic move by Mondelez in bidding for Hershey. The merger would have resulted to Mondelez being the largest player in the global confectionary industry. It is interesting to note that Mondelez is not the first player to bid for Hershey. Switzerland-based Nestlé too had reportedly proposed to acquire Hershey. 

Hershey has not explained the reasons for rejecting the acquisition bid by Mondelez. The company has rejected such bids in the past as well, especially one from Wrigley a decade back. One possible reason for the rejection might be the influence of the Hershey Trust Co.

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