Report: Hershey Trust Rejects Mondelēz Takeover Offer as Too Low

History has repeated itself as Hershey’s controlling owner yesterday rejected a preliminary takeover offer from candy and snacking rival Mondelēz International, according to a Bloomberg News report citing people familiar with the matter.

The Hershey Trust – which holds approximately 80% of the voting power at the company – labeled the offer as too low, per the report. A deal would bring brands like Sour Patch Kids, Clif, Reese’s, and SkinnyPop under the same roof and generate annual sales of nearly $50 billion.

Mondelēz’s bid to take over Hershey comes just weeks after the latter business posted lower-than-forecast third-quarter earnings driven by high cocoa costs and increased pressure across all segments. Looking ahead, CEO Michele Buck said the company’s top priority will be reigniting its chocolate business.

“We are managing this business for the long term. Our team is taking action to control the variables we can control and monitoring those we cannot. We are addressing consumer and customer evolution while also making organizational changes needed to ensure the competitive health of our business,” Buck told analysts during last month’s earnings call.

This isn’t the first time Hershey has rejected an acquisition proposal from Mondelez. In 2016, Mondelēz offered to acquire the business for $107 per share in a deal valued at $23 billion, but Hershey said it wouldn’t negotiate a deal for an offer of less than $125 per share. Mondelēz ceased discussions as it saw “no actionable path forward.”

Meanwhile, Hershey is on the hunt for a new U.S. Confection president. Michael Del Pozzo, who led the business unit for four months, is departing the company to return to PepsiCo, where he had worked his entire career prior to joining Hershey. In the interim, Buck will assume leadership of U.S. Confection as the company identifies Del Pozzo’s successor.

In a separate Wednesday announcement, Mondelēz’s board of directors announced a new share repurchase authorization of up to $9 billion of Class A common stock, effective Jan. 1, 2025. The new authorization, effective until Dec. 31, 2027, replaces the current $6 billion authorization.

Additionally, the Oreo maker Mondelēz reaffirmed its commitment to an acquisition strategy focused on bolt-on assets similar to the recent acquisitions of Chipita, Clif, and Ricolino.

“We continue to make significant progress against our strategy of accelerating growth and focusing our portfolio in the attractive, resilient categories of chocolate, biscuits, and baked snacks. Our teams remain focused on executing against our growth agenda in a challenging and dynamic operating environment,” said Dirk Van de Put, chairman and CEO of Mondelēz, in a statement.