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| Hershey Rejects Mondelez’s $23 Billion Takeover Offer | Hershey Rejects Mondelez’s $23 Billion Takeover Offer |
| (about 1 hour later) | |
| Mondelez International, whose snacks also run from Nabisco to Cadbury chocolate, has made a $23 billion takeover offer for Hershey in what would be one of the biggest deals of the year. | Mondelez International, whose snacks also run from Nabisco to Cadbury chocolate, has made a $23 billion takeover offer for Hershey in what would be one of the biggest deals of the year. |
| Hershey said on Thursday that Mondelez had offered to pay $107 a share in cash and stock — a premium of about 10 percent to Hershey’s closing stock price. Hershey said that its board had “rejected the indication of interest and determined that it provided no basis for further discussion between Mondelez and the company.” | |
| If the two companies strike a deal, it would be among the most prominent in a year that has been lacking in daring deal-making. | If the two companies strike a deal, it would be among the most prominent in a year that has been lacking in daring deal-making. |
| Buying Hershey would be the boldest transaction for Mondelez — cleaved from what was once Kraft — since its former parent bought Cadbury of Britain in a $19 billion deal more than six years ago. | Buying Hershey would be the boldest transaction for Mondelez — cleaved from what was once Kraft — since its former parent bought Cadbury of Britain in a $19 billion deal more than six years ago. |
| But winning Hershey could prove tricky for Mondelez, since the smaller chocolate maker is effectively controlled by a charitable trust that owns about 81 percent of the company’s voting power. | But winning Hershey could prove tricky for Mondelez, since the smaller chocolate maker is effectively controlled by a charitable trust that owns about 81 percent of the company’s voting power. |
| The Hershey Trust, established by Milton Hershey and his wife, Catherine, in 1905, has opposed takeovers of the company in the past. In 2002, the trust halted an auction of the company at the 11th hour as it was about to accept a $12.5 billion deal from Wm. Wrigley Jr. Company. | The Hershey Trust, established by Milton Hershey and his wife, Catherine, in 1905, has opposed takeovers of the company in the past. In 2002, the trust halted an auction of the company at the 11th hour as it was about to accept a $12.5 billion deal from Wm. Wrigley Jr. Company. |
| News of the approach, which was reported earlier by The Wall Street Journal, sent shares in Hershey up 15 percent in trading on Thursday, to $111.87. Shares in Mondelez rose 4 percent, to $44.71. | News of the approach, which was reported earlier by The Wall Street Journal, sent shares in Hershey up 15 percent in trading on Thursday, to $111.87. Shares in Mondelez rose 4 percent, to $44.71. |
| Hershey’s market value as of Wednesday’s close was $21 billion, while Mondelez’s stood at $69 billion. | Hershey’s market value as of Wednesday’s close was $21 billion, while Mondelez’s stood at $69 billion. |
| Mondelez declined to comment. | Mondelez declined to comment. |
| Analysts and investors said that combining the two has its merits. | Analysts and investors said that combining the two has its merits. |
| “It’s a surprising move, but it does make sense for Mondelez,” said Jack Skelly, a food analyst at Euromonitor. | “It’s a surprising move, but it does make sense for Mondelez,” said Jack Skelly, a food analyst at Euromonitor. |
| Mondelez, which was spun off from Kraft in 2012, is the world’s second-largest confectionery company — but it has very little business in the United States. Hershey, on the other hand, gets more than four-fifths of its sales in North America. | Mondelez, which was spun off from Kraft in 2012, is the world’s second-largest confectionery company — but it has very little business in the United States. Hershey, on the other hand, gets more than four-fifths of its sales in North America. |
| Additionally, Hershey owns the rights to make and market Cadbury chocolate — but not other candies — in the United States, and it took legal action to stop imports of Cadbury chocolates made abroad. | Additionally, Hershey owns the rights to make and market Cadbury chocolate — but not other candies — in the United States, and it took legal action to stop imports of Cadbury chocolates made abroad. |
| Both companies have improved profitability over the last several years and moved into sexier corners of the food business. Hershey, for instance, bought Krave and got into the increasingly popular jerky business. | Both companies have improved profitability over the last several years and moved into sexier corners of the food business. Hershey, for instance, bought Krave and got into the increasingly popular jerky business. |
| Mondelez bought Enjoy Life Foods, testing the market for gluten-free products. But the company has come under pressure from activist investors in recent years, including the billionaires Nelson Peltz and William A. Ackman. | Mondelez bought Enjoy Life Foods, testing the market for gluten-free products. But the company has come under pressure from activist investors in recent years, including the billionaires Nelson Peltz and William A. Ackman. |
| Meanwhile, rising cocoa prices have made the chocolate business less profitable, and it’s hard to raise sales of chocolate in the United States, the world’s largest consumer of chocolate. “Also,” Mr. Skelly said, “it’s difficult to generate sales because people are starting to think of chocolate as an unhealthy product.” | Meanwhile, rising cocoa prices have made the chocolate business less profitable, and it’s hard to raise sales of chocolate in the United States, the world’s largest consumer of chocolate. “Also,” Mr. Skelly said, “it’s difficult to generate sales because people are starting to think of chocolate as an unhealthy product.” |
| Mars, which is privately held, is the world’s largest confectionery company, followed by Mondelez. The others in the top five are Nestlé, Ferrero Group and Hershey. | Mars, which is privately held, is the world’s largest confectionery company, followed by Mondelez. The others in the top five are Nestlé, Ferrero Group and Hershey. |