Mondelez International, the maker of Oreo cookies and Ritz crackers, is reportedly considering a takeover of iconic American chocolate maker Hershey.
It’s a potential blockbuster deal, first reported by Bloomberg this morning, that could create a $50 billion snacking powerhouse.
According to sources close to the matter, the Chicago-based snack giant has tentatively approached Hershey, famous for its Kisses and Reese’s Peanut Butter Cups.
Mondelez, valued at $84 billion, is keen to join forces with Hershey, which has a market value of about $35 billion.
But the company – then known as Kraft – faced the wrath of Cadbury’s chocolate fans after acquiring the British brand.
Mondelez International is a spin-off of the American giant Kraft Foods, which bought Cadbury’s in 2010. The company was founded in Great Britain in 1824 by John Cadbury.
A series of complaints, including changing the recipe of the brand’s iconic Crème Eggs, reducing the size of bars, bizarre new recipes and job losses.
It led to claims that Cadbury had ‘betrayed its heritage’ after the takeover, according to a TV documentary from 2016 from the respected Dispatches series.
Cadbury parent Mondelez International is investigating the takeover of chocolate maker Hershey, Bloomberg reported on Monday
Mondelez, valued at $84 billion, is keen to join forces with Hershey, which has a market value of about $35 billion. The deal would create one of the largest confectioners in the world.
This isn’t Mondelez’s first attempt to woo Hershey. In 2016, the company walked away after its $23 billion offer was rejected.
But as the packaged food industry faces sluggish growth and changing consumer habits, the stakes for consolidation are greater than ever.
If successful, the acquisition would surpass this year’s biggest deal: Mars’ $36 billion purchase of Kellanova. Brands include Pringles, Carrs and Special K.
But the path to a takeover is not easy: Any deal requires approval from the Hershey Trust, which owns 80 percent of the company’s voting rights.
Hershey’s shares are down 6 percent this year and the company is struggling with skyrocketing cocoa and sugar costs.
After Bloomberg’s report, shares of Hershey rose 17 percent, while those of Mondelez fell about 4 percent.
CEO Michele Buck recently cut the company’s sales outlook as cash-strapped consumers tighten their belts.
Both Mondelez and Hershey have remained tight-lipped, with no official comment on deal speculation.