Mondelēz said it was “disappointed” the takeover talks fell through, but it decided there was “no actionable path forward” following lengthy discussions.
A deal between the two companies would have created the world’s biggest maker of confectionery. Hershey was looking for a bid of at least $125 (£96) a share. Mondelēz initially offered $107 (£82) a share two months ago. It is believed the offer was 50% in cash and 50% in stock.
Mondelēz International chairman and ceo Irene Rosenfeld said: “Our proposal to acquire Hershey reflected our 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.”
Would reject anything under $125
Mondelēz increased its offer to $115 (£88) a share last week, Reuters reported. However, Hershey said it would be unable to consider the offer until its trust reconstituted next year and, even then, it said it would reject anything under $125 (£96) a share.
“Following additional discussions, and taking into account recent shareholder developments at Hershey, we determined that there is no actionable path forward toward an agreement,” said Rosenfeld.
“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.”
Hershey shares plummeted by 11.4% in late-hours trading – down to $99 (£76) – while shares in Mondelēz rose by nearly 4%.
Hershey’s growth has slowed over the past two years. It is now the fifth largest confectionery company in the world, while Mondelēz ranked second. Mars Inc. is the world’s largest confectionery company.
Meanwhile, Mondelēz had recently announced it bought the Cadbury licence from Burton’s Biscuit Company, in a deal worth £200M. The deal meant Mondelēz could manufacture, market and sell Cadbury-branded biscuits, including Cadbury Fingers and Cadbury Animals.
- Hershey wanted at least $125 (£96) a share
- Mondelēz initially offered $107 (£82) a share
- Increased offer to $115 (£88) a share
- Mondelēz concluded “no actionable path forward”