Hershey Trust Co. Rejects Mondelez's Takeover Bid - Bloomberg

According to a report based on sources close to the matter, Hershey Trust Co., the primary owner of Hershey Co., has rejected a preliminary takeover offer from Mondelez International Inc. This move could bring an end to a potential acquisition that would combine two major players in the food industry, approaching total sales of $50 billion.

Hershey Trust Co., which holds approximately 80% of the voting rights in Hershey Co., is reported to have rejected the offer on the grounds that it was inadequate. The trust's approval, which owns almost all of Hershey Co.'s Class B shares, is critical for any acquisition to take place.

Earlier in the week, Bloomberg News revealed that Mondelez had initiated a preliminary approach to Hershey Co. This is not Mondelez's first attempt to acquire the chocolate manufacturer; a previous bid of $23 billion in 2016 was also rejected by Hershey Co.

On Wednesday, Mondelez announced a share buyback plan of up to $9 billion, reaffirming its commitment to strategic capital allocation, which includes reinvesting in its brands and pursuing smaller, complementary acquisitions. Given Hershey Co.'s valuation of over $40 billion, including debt, this acquisition would represent a significant move for Mondelez.

Adam Crisafulli from Vital Knowledge commented that Mondelez's buyback announcement has had a "cold shower effect" on the possibility of a deal with Hershey Co.

In the wake of these developments, Mondelez's shares rose by 3.4% on the New York Stock Exchange, while Hershey's stock experienced a 4% decline.