The Hershey Trust Co. has reportedly turned down multi-billion dollar offers from Mondelez International, which sought to initiate a takeover bid for the fellow U.S. confectionery giant, according to Neill Ba rston.
Earlier this week, it was reported that the Chicago-based snacking company aimed to make its second bid for its competitor in a decade. However, sources within the industry indicate that the proposal was not high enough to secure an agreement.
Neither Hershey nor Mondelez has commented on what would have been a significant mega-merger, comparable to Mars’s recent acquisition of Kellanova, which would have had a considerable impact on the broader confectionery market.
The decision to pursue the acquisition of Hershey coincided with the announcement that Michael Del Pozzo, the president of US confections, would be departing the company effective immediately to take on a position at his previous employer.
In light of this change, the company indicated that CEO Michele Buck would temporarily assume Del Pozzo’s responsibilities.
Following the reportedly declined takeover offer, Mondelez’s board of directors authorized a new share repurchase program, allowing for the buyback of up to $9 billion in Class A common stock, signaling a shift towards strengthening its internal operations.
This will replace the existing $6 billion authorization, of which around $2.8 billion is currently available and set to expire on December 31, 2025.
The company may buy back shares through open market transactions, privately negotiated deals, or a combination of both methods. Share repurchases will be at the company’s discretion, taking into account market conditions, business considerations, and other relevant factors.
While not officially commenting on the reportedly unsuccessful major bid, Mondelez has reiterated its commitment to its primary capital allocation priorities.
These include reinvesting in brands and capabilities, returning capital to shareholders through share buybacks and dividends, and pursuing mergers and acquisitions.
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