A deal with Hershey would have created the world’s largest candy company, eliminating virtually any chance of Mondelez being targeted by a rival.
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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.
Mondelez shares, which closed flat, added 3.9% in late trading.
Shares in Hershey were down almost 12% at $98.60 in after-hours trading in NY following the news.
Hershey (HSY) investors are having a bittersweet day.
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The deal would have created the world’s biggest maker of confectionary but in a statement issued yesterday Mondelēz announced that it had now ended discussions with Hershey regarding a possible combination of the two companies.
Mondelez could have been very helpful in expansion overseas by Hershey, while the chocolate business of Hershey in the US could have helped Mondelez. American Air said Kirby’s exit followed discussions in which Kirby was reportedly told he needed to “transition out” of the company. “Not a lot of other companies can do that kind of combination”.
Hershey’s chocolate bars for sale in Chicago, Illinois on July 15, 2014. Unifying that brand was considered part of the rationale for the merger. “Mondelez made an offer of $115 a share after. a first bid of $107 from this June”, Oberhuber noted. The Wall Street Journal previously reported on the negotiations. But despite these merits, we weren’t convinced that even a higher price tag would make Hershey amenable to an agreement. The $12 billion charity organization is in flux, with many of its directors headed for the exits.
Hershey responded that the trust would not be able to consider an offer until it is reconstituted next year, the source said. 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. It also operates the Milton Hershey School, which educates underprivileged children. Under that deal, five current members, including Chairwoman Velma Redmond, will retire through December 31, 2017.
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The trust has scuttled takeovers in the past.
