After extending a preliminary takeover bid to acquire The Hershey Co, Mondelez International has now hit a roadblock with the deal once again as the main owner of US chocolate maker- Hershey Trust Co which apparently owns almost all of the company’s Class B stock, has turned down the former’s offer and dismissed it as ‘too low’.
According to several media reports, this deal, if agreed upon by both parties, could potentially create a food giant with combined sales of almost $50 billion.
That being said, securing the backing of Hershey Trust Co is crucial for any deal at Hershey Co and is quite a tough nut to crack as it has used its voting power to scuttle deals in the past as well.
In 2016, Mondelez International’s discussions about a potential takeover of Hershey had met an end after seeing a $23 billion bid being rejected by Hershey Trust Co.
Earlier this month, Mondelez International had elaborated on its commitment to its capital allocation priorities which include a reinvestment in brands and an acquisition strategy that is focused on bolt-on assets.
The parent company of Twizzlers, Hershey’s Kisses, Jolly Rancher, Ice Breakers and more led by Chief Executive Officer- Michele Buck currently has been hit by record high cocoa prices and sugar costs. Not just this, Hershey’s third-quarter earnings had also missed analyst expectations some time back.
