Hershey Rejects $23 Billion Takeover Bid From Mondelez

The merger would create world's biggest candy company
June 30, 2016 Updated: June 30, 2016

Hershey Co. (HSY:NYSE) shares jumped 15 percent on media reports that the chocolate company had received a takeover bid from its rival Mondelez International (MDLZ:NASDAQ). However, Hershey’s board unanimously rejected the offer and determined that “it provided no basis for further discussion.”

Mondelez, the maker of Oreo cookies and Cadbury chocolate bars, offered $107 per share for Hershey in a 50 percent cash and a 50 percent stock deal. This implies a valuation of $23 billion for Hershey, the maker of famous Kisses and Reese’s chocolate bars.

Mondelez is the world’s no.2 candy maker with $14.4 billion sales in 2015, second after Mars Inc. with $18.5 billion sales. The merger with Hershey, which is the sixth largest candy maker in the world, would make Mondelez the market leader.

Hershey shares jumped 15 percent to $111.87, the highest price in the last five years. (Bloomberg)
Hershey shares jumped 15 percent to $111.87, the highest price in the last five years. (Bloomberg)

The Hershey trust owns 8.4 percent of Hershey’s common stock and 81 percent of its voting rights. The founder of Hershey, Milton Hershey, also founded the trust in 1905 because he did not have any children to bequeath his fortune or the company onto. The primary purpose of the trust was to benefit the private boarding school for low-income families, the Milton Hershey School. 

Hershey shares surged 15 percent to $111.87 on Thursday after the media first reported the bid. Shares of the chocolate maker were halted on pending news. Mondelez shares also rose 4.7 percent to $45.

Mondelez headquartered in Deerfield Illinois has nearly 100,000 employees. Hershey Co. headquartered in Hershey, Pennsylvania has nearly 15,000 employees.



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