Mondelez says it ended talks to buy Hershey

Hershey shares experienced a 12% drop when the news broke that the deal has been abandoned – and Mondelez rose by nearly 4%.

Hershey shares slumped on the news, falling more than 10% after hours to under $100 a share after closing at $111.67.

In an effort to “sweeten” the deal, Mondelez reportedly promised to protect Hershey jobs, move its global chocolate headquarters to Hershey, Pa. and rename the combined company Hershey.

Hershey rejected Mondelez’s $US23 billion offer, representing a 10 per cent premium, in June, but Mondelez was holding out for an agreement.

But “Rosenfeld faced staunch opposition from the Hershey Trust, a $12 billion charity created by the company’s founder a century ago”.

The offer to buy Hershey came as the charitable trust that controls the company has been in turmoil.

Confectionery major Mondelez has abandoned talks to buy candymaker Hershey, two months after the USA chocolate company turned down its $23 billion cash-and-stock bid.

The owner of Cadbury’s and Oreo has abandoned an £18bn ($23bn) offer for Hershey.

Earlier this month, the Hershey Trust, which has gone through several recent unrelated scandals, announced it was adding nine new board members by the end of next year, further complicating a potential sale.

The team rates Mondelez as a Buy with a ratings score of B. This is driven by multiple strengths, which it believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks it covers.

“While we are disappointed in this outcome, we remain disciplined in our approach to creating value, including through acquisitions”, Rosenfeld said on Monday.

Then there’s the Hershey Trust. Even if Mondelez were able to bring Hershey to a consensus, the amalgamation of the two companies wouldn’t have made so much sense, especially given the high-calorie food Hershey is known to sell.

Mondelez could have been very helpful in expansion overseas by Hershey, while the chocolate business of Hershey in the US could have helped Mondelez.

Kirby will now be responsible for United’s “operations, marketing, sales, alliances, network planning and revenue management”, the United statement said.

Analysts have viewed Mondelez itself as a possible takeover target before the bid for Hershey, which was viewed by some as a way for Rosenfeld to scale up the business to prevent a possible takeover.