Mondelez passes on Hersheys as deal sours

SHELVE any dreams of a Reese’s Peanut Butter Cup/ Oreo fusion cookie: plans to make the world’s biggest sweets firm have collapsed after Cadbury Dairy Milk-maker Mondelez called off its $23 billion (£17.6 billion) pursuit of US rival and chocolatier Hershey.

After a takeover chase lasting more than two months, Mondelez would not raise its offer to the starting bid of $125 a share that insiders said Hershey was demanding. It had initially offered $107 per share and is thought to have gone up to $115 per share.

Mondelez — which bought Cadbury’s in 2010 when it was known as Kraft Foods in a hostile bid — had struggled to buy Hershey because of its corporate structure. It is majority-controlled by the Hershey Trust charity, which has prevented previous sales of the company, and which is in the process of revamping its board after coming under scrutiny for big-spending.

After Mondelez, which makes Oreos, called off the takeover today, Hershey shares tumbled 11% and Mondelez stock climbed 3.3%.

“Combining our two iconic American companies would create an industry leader with global scale in snacking and confectionery,” said Irene Rosenfeld, Mondelez chairman. She added that she was “disappointed in this outcome,” but claimed the firm would “remain disciplined in our approach to creating value, including through acquisitions.”