Hershey's majority owner turns down Mondelez's takeover bid as too low
US chocolate maker Hershey has rejected a preliminary takeover offer from Mondelez International, people familiar with the matter said, potentially ending a fresh pursuit that would've created a food giant with combined sales of almost $50 billion.
Hershey Trust, which has roughly 80% of the voting power at the company, turned down the bid as too low, said the people, who declined to be identified because discussions are private. Securing the trust's backing is vital for any deal for Hershey as it owns almost all of the company's Class B stock.
Bloomberg News reported earlier this week that Mondelez made a preliminary approach for Hershey, citing people familiar with the matter. It's not the first time Mondelez has sought a deal. In 2016, it walked away from discussions about a potential takeover after seeing a $23 billion bid rejected by the chocolate maker.
Mondelez on Wednesday approved a stock repurchase authorization of as much as $9 billion and said it's committed to its capital allocation priorities, including reinvesting in brands and «an acquisition strategy that is focused on bolt-on assets,» a term used to describe relatively small deals. Hershey would be a sizable acquisition with a valuation of more than $40 billion including debt.
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