Hershey reportedly rejects Mondelez mega merger bid
The Hershey stand at Sweets & Snacks Expo 2023 in Chicago. Pic: Neill Barston
The Hershey Trust Co, has reportedly rejected multi-billion advances from Mondelez International which had moved to make a takeover bid for the fellow US confectionery giant, writes Neill Barston.
As reported earlier this week, the Chicago headquartered snacking firm had looked to make its second bid for its rival in a decade – but according to sources close to the industry, the offer was not sufficiently high to gain an agreement.
Neither Hershey or Mondelez has commented on what would have been a major mega merger on a scale along with Mars’s recent purchase of Kellanova and have had a significant impact upon the wider confectionery sector.
Notably, the move to acquire Hershey came as the business confirmed earlier this week that its president of US confections, Michael Del Pozzo, would be leaving with near immediate effect (yesterday) to pursue a role at his former business. This prompted the business to state that Michele Buck, CEO would also add the post on a temporary basis to her areas of responsibility.
In the wake of the reportedly rejected takeover bid, Mondelez board of directors approved a new share repurchase authorisation of up to $9 billion of Class A common stock, in a seeming pivot to focusing on building-up its own internal structures.
This will replace the current $6 billion authorisation, of which approximately $2.8 billion is presently remaining and would otherwise expire on December 31, 2025. The company may repurchase the shares in open market transactions, privately negotiated transactions or a combination of the foregoing. Share repurchases are subject to the company’s discretion based on market conditions, business considerations and other factors.
Without making a formal comment on the reportedly failed major bid, Mondelez said that it also remains committed to its key capital allocation priorities, which include reinvesting in brands and capabilities, returning capital to shareholders through share repurchases and dividends, and M&A.
