Hershey Trust Rejects Mondelez’s Takeover Offer

The Hershey Trust Co., the principal owner of Hershey Co. (NYSE: HSY), has declined a preliminary takeover bid from Mondelez International Inc. (NASDAQ: MDLZ), as reported by Bloomberg. This decision could thwart a potential acquisition that would have merged two significant players in the food industry, with combined sales approaching $50 billion.

The Hershey Trust Co. holds about 80% of the voting rights at Hershey Co. and reportedly rejected the offer due to its insufficiency. The trust, which possesses nearly all Class B stock of Hershey Co., plays a crucial role in any takeover process.

Earlier in the week, it was revealed by Bloomberg News that Mondelez had made an initial approach to acquire Hershey Co. This is not Mondelez's first attempt, as a previous $23 billion offer in 2016 was also rejected by Hershey.

On Wednesday, Mondelez announced a stock buyback plan of up to $9 billion, emphasizing its commitment to strategic capital allocation, which includes reinvesting in brands and pursuing smaller acquisitions. Given Hershey’s valuation exceeding $40 billion, any acquisition would be monumental for Mondelez.

Analyst Adam Crisafulli of Vital Knowledge noted that Mondelez's buyback announcement dampened the chances of a deal with Hershey Co.

In the wake of these events, Mondelez shares rose by 3.4% in New York, while Hershey's stock fell by 4%.

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