Hershey shares tumbled by as much as 12% in late USA trading on the news.
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Mondelez, owner of Oreo, Nabisco and Cadbury, said Monday after market hours that it had ended discussions with Hershey about buying the business.
USA industrial snacks giant Mondelez International said Monday, August 29, it had dropped plans to merge with chocolatier The Hershey Company. Hershey rejected the offer, which amounted to $107 a share, half in cash and half in stock.
Mondelez Chairman and CEO Irene Rosenfeld said that the proposal had reflected the company’s “conviction that combining our two iconic American companies would create an industry leader with global scale in snacking and confectionery and a strong portfolio of complementary brands”.
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.
WSJ reported Hershey indicated no deal would be possible before a reconstitution of the Hershey Trust Co., which isn’t expected to happen until sometime next year.
Last year, William Ackman revealed his activist hedge fund Pershing Square had built a stake worth about $5.5 billion in Mondelez, in what was seen as an attempt to push the company to boost earnings or sell itself. Hershey was looking for a bid of at least $125 (£96) a share.
NEW YORK (AP) – U.S. stocks were slightly lower in afternoon trading Tuesday in another quiet day as the slow summer season comes to an end.
Mondelez shares initially popped on news of its bid for Hershey, but the stock has since come back down to earth.
Why did Mondelez International walk away from a bid for The Hershey Co.?
Then there’s the Hershey Trust. Indeed, Mondelez called off the pursuit because the deal was attractive but not essential and because it was eager to avoid overpaying, the person said.
After months of negotiations, Mondelez International, one of the world’s leading snack companies, announced Monday it is no longer pursuing a merger with the Hershey Company.
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The company is the product of a 2012 separation from Kraft Foods Inc., which had been under pressure from Trian Fund Management LP and other activist investors.
