The acquisition would have made the combined company the candy industry’s largest player.Charlie Riedel/The Associated Press
Oreo cookie maker Mondelez International Inc. says it has ended discussions to buy Hershey Co., a combination that would have created a global powerhouse selling some of the world's best known chocolates and snacks.
Hershey had said in June that it rejected a preliminary takeover bid from Mondelez valued at roughly $22.3-billion (U.S.), according to FactSet. It said at the time that the offer provided "no basis for further discussion." A representative for Hershey did not immediately respond to a request for comment on Monday. A deal would have been subject to the Hershey Trust, a controlling shareholder.
Hershey shares slid 11 per cent in after-hours trading, to $99 while Mondelez shares added 3.4 per cent, to $44.50, in extended trading.
In a statement, Mondelez's chief executive officer Irene Rosenfeld said the company decided "there is no actionable path forward toward an agreement" following additional discussions.
Mondelez, based in Deerfield, Ill., makes Nabisco cookies, Cadbury chocolate and Trident gum. The company was created after a split from Kraft Foods, which has since gone on to combine with ketchup maker Heinz to create the Kraft Heinz Co.
In June, The Wall Street Journal reported that Mondelez told Hershey it would take the chocolate maker's name and move its global headquarters to Hershey, Penn., as part of the deal. The acquisition would have made the combined company the candy industry's biggest, according to Euromonitor International, passing the current No. 1, Mars Inc.
The deal was seen as complementary in part because Mondelez gets most of its revenue from overseas, while Hershey gets most of its revenue from North America.
The offer to buy Hershey came as the charitable trust that controls the company has been in turmoil. In July, the trust said a board member was resigning. Later, Pennsylvania's attorney general said it reached an agreement with the trust that involved five board members leaving, and limiting compensation. The agreement came from an investigation into the trust's compliance with a 2013 agreement.