Oreo maker Mondelez is reportedly trying to buy Hershey. In 2016, Hershey’s board rejected the snacking company’s $23 billion offer. Concerns about…
In 2016, Hershey's board rejected the snacking company's $23 billion offer.Hershey's stock has risen 7% this year, raising its market cap to $40.49 billion. Prior to Monday's move, shares had fallen 6% this year, hurt by concerns about the growing usage of GLP-1 drugs and soaring cocoa prices.
Share of Mondelez were down 2% in morning trading. The company's stock has fallen 15% this year, dragging its market cap down to $82.22 billion.Mondelez, which owns Oreo, Cadbury and Honey Maid, previously tried to buy Hershey in June 2016 for a cash-and-stock bid of $23 billion. Hershey's board unanimouslySince its founding in 1894 by Milton Hershey, the company has remained independent, despite takeover attempts and even a strategic review in 2007 by its board.
Hershey's dual-class structure gives holders of its Class B common stock, largely held by the Hershey Trust, 10 votes for every share. As a result, the Hershey Trust has"substantial control" over the company's future, according to research note from J.P. Morgan analyst Ken Goldman published on Wednesday.Pennsylvania law also gives the state's attorney general the power to intercede on any deal that takes power away from the trust.
That's what happened in 2002, after the Hershey Trust announced it planned to sell its controlling interest in the company to Wrigley. Following criticism from the public, the attorney general stepped in to block the sale through the Dauphin County Orphans' Court, which resolves legal issues related to charitable trusts, and 10 of the trust's 17 board members departed.
Consumer packaged goods companies have been looking to deals to grow their sales after years of price hikes have put pressure on demand for their existing brands. For example, M&M's owner Mars bought Pringles maker Kellanova this summer for $36 billion.
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