Newspaper article International New York Times

Mondelez Drops Plans to Acquire Hershey ; Outcome Dashes Hopes for Deal Blending Makers of Popular Snack Brands

Newspaper article International New York Times

Mondelez Drops Plans to Acquire Hershey ; Outcome Dashes Hopes for Deal Blending Makers of Popular Snack Brands

Article excerpt

The news dashed hopes for what could have been one of the biggest deals this year, combining the maker of Hershey's Kisses with the owner of Oreo.

For two brief months, it looked as if there was a possibility of a more than $20 billion takeover that would combine the makers of Oreos and Hershey's Kisses. But chocolate lovers' hopes have been dashed and the deal discussions ended.

Mondelez International, the owner of snack brands like Oreo and Nabisco, said on Monday that it was no longer seeking to acquire the Hershey Company. Hershey rebuffed a $23 billion offer from Mondelez in June, but on Monday it became apparent that they had restarted talks more recently.

"Following additional discussions, and taking into account recent shareholder developments at Hershey, we determined that there is no actionable path forward toward an agreement," Irene B. Rosenfeld, the chairwoman and chief executive of Mondelez, said in a statement. "While we are disappointed in this outcome, we remain disciplined in our approach to creating value, including through acquisitions, and confident that our advantaged platform positions us well for top- tier performance over the long term."

Shares of Hershey tumbled almost 12 percent in after-hours trading, while those of Mondelez gained about 3 percent.

Mondelez's offer in June consisted of $107 in cash and stock for every Hershey share -- a 10 percent premium at the time.

Over the last few weeks, Mondelez floated an offer of about $115 a share, according to a person with knowledge of the talks. Hershey indicated that the figure had to be at least $125 to continue negotiations, said the person, who was not authorized to discuss the talks publicly.

That gap in pricing, as well as uncertainty surrounding the status of Hershey's largest shareholder, were the primary reasons the bid was abandoned.

A representative from Hershey confirmed that there were additional communications with Mondelez and that Mondelez was no longer pursuing a deal. …

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