USA. Mondelēz International’s US$23 billion bid to acquire The Hershey Company has been rejected.
However, some analysts are expecting Mondelēz to make an improved offer. If an acquisition were to be completed, it would create the world’s largest confectionery company.
The Hershey Company said the “preliminary, non-binding indication of interest from Mondelēz International to acquire the company” was for a mix of cash and stock consideration, totalling US$107 a share of Hershey common stock. The indication of interest also included other non-monetary considerations, it said.
Hershey, whose portfolio includes the hugely popular Reese’s brand, stated: “The company’s Board of Directors, after receiving input from the company’s management and its outside financial and legal advisors, carefully evaluated the indication of interest. Following this review, the Board of Directors of the company unanimously rejected the indication of interest and determined that it provided no basis for further discussion between Mondelēz and the company.”
After news of the bid on 30 June broke, Hershey’s stock price soared to US$117. It stayed high even after the bid was rejected.
The acquisition would combine Hershey’s strong US business with Mondelēz’s global distribution footprint.
Any potential deal hinges on the Hershey Trust, which controls 81% of shareholder voting power. The trust is currently being investigated by the Pennsylvania Attorney General’s office for its use of funds.
An acquisition would also have to secure required regulatory approval before being completed.
