It indicated that it would be hard to strike any deal prior to next year due to a shift in dynamics with Hershey Trust Company, its largest shareholder, said people close to the situation.
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Illinois-based Mondelez, the maker of Oreo cookies and Cadbury chocolates, was seeking to boost its presence in the USA market with the acquisition of Hershey. A deal would have created the world’s largest candy company.
Buying Hershey would have given Mondelez control over the production and distribution of Cadbury chocolates in the USA, which now Hershey holds the licence to produce, paying royalties to Mondelez.
Shares of Mondelez, the maker of Oreo cookies and Cadbury chocolates, rose almost 4 percent in extended trading on Monday, while Hershey’s shares plunged about 12 percent.
Mondelez – which bought Cadbury’s in 2010 when it was known as Kraft Foods – had struggled to buy Hershey because of its corporate structure.
Back in June, The Wall Street Journal had reported that Mondelez told Hershey it would take the chocolate maker’s name and move its global headquarters to Hershey, Pennsylvania as part of the deal.
In response, Hershey said to start discussions the price would have to be at least $125 per share.
Boy oh boy, did Hershey’s (HSY) top brass just shaft its shareholders or what? The acquisition would have created synergies and helped Hershey expand its reach overseas, while boosting Mondelez sales in the US.
Kirby will now be responsible for United’s “operations, marketing, sales, alliances, network planning and revenue management”, the United statement said. The company also added that its trust would have to complete its internal overhaul before an agreement could be reached and that most likely will not happen until late next year.
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The agreement calls for the trust’s board to be expanded from 10 members to 13, and for five members to resign in order for 10-year terms to be enforced.
