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Mondelez International Inc. (MDLZ)

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Mondelez backs off from Hershey pursuit

30 Aug 16

LONDON (ShareCast) - (ShareCast News) - The owner of Cadbury chocolate has lost its interest in buying US confectionery company Hershey, after having two bids rebuffed in recent months.
Mondelez International, one of the world's largest snack-makers, had put forward offers of $107 and $115 a share for Hershey, but the company's notoriously stringent board were uninterested, valuing the business at around $125 per share, according to the Financial Times.

Monday's news had a late impact on US trading, as Hershey fell 11.2% in New York, after rising 16% since reports of the first offer from Mondelez.

Hershey Trust, a charity which has previously fended off sales of the company, holds 80% of the voting rights in Hershey.

The matter was further complicated after a revamp of the Hershey Trust was announced in response to heavy scrutiny regarding its spending practices. Mondelez are reported to have been wary of such an overhaul, and contributed to their pulling out of the deal.

"We remain disciplined in our approach to creating value, including through acquisitions, and confident that it positions us well for top-tier performance over the long term," said Rosenfeld.The company's chief executive Irene Rosenfeld said in a statement that they were "disappointed" with how the negotiations had concluded, and added that there was "no actionable path forward toward an agreement".

The deal would have combined two industry leaders to create the largest confectionery company in the world.

Hershey takes in around 90% of its revenue from the United States, while sales in China have been dropping while it tries to acquire a local brand to boost its profile.

Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are end of day values only.


Market Data

Currency US Dollars
52 Week High $59.68
52 Week Low $41.93
Shares Issued 1,451.00m
Market Cap $69,488m


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