June 30, 2016

Mondelez makes takeover offer for Hershey

Mondelez International has made a takeover offer for Hershey – a deal that would create the industry’s largest confection maker and surpass Mars, Inc.

Earlier this month, Mondelez officials sent a letter to Hershey sharing their interest. Hershey has a market value of $25 billion, according to media reports.

Mondelez, manufacturer of Oreo, operates mainly overseas and acquiring Hershey would help to balance their portfolio. Hershey saw roughly 90 percent of its revenues in North America in 2015. Acquiring Hershey is anticipated to position Mondelez to surpass Mars as one of the industry’s biggest candy manufacturers.

In 2012, Mondelez split from Kraft Foods and aimed to focus on faster growing emerging markets. However the global slowdown negatively impacted the company and pushed Mondelez to consider the US market, which provided more opportunities.

Hershey has faced its own set of hurdles within the last few years. American consumers have cutback on sugar consumption, and Hershey has had to look to opportunities within less sugary snacks. These concerns have made Hershey a target for a takeover, according to industry analysts. The Hershey Trust Co., however, controls more than half, 80 percent, of voting rights, which raises the question will the Hershey family trust approve of a buyout.

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