Mondelez International, the company behind popular snacks and sweets brands, is reportedly exploring a possible acquisition of the iconic American chocolate maker Hershey Co. According to sources familiar with the matter, the deal could create a combined food giant with nearly $50 billion in sales.
The Chicago-based Mondelez has already made an initial approach to Hershey, though the discussions are still in their early stages and remain confidential. As a result of the news, Hershey’s stock surged by as much as 19% on Monday, marking its biggest intraday jump in over eight years. The shares closed up 11% in New York, lifting the company’s market value to $39 billion. In contrast, Mondelez’s shares dropped by 2.3%, giving the company a market value of approximately $82 billion.
Hershey Co., which is headquartered in Hershey, Pennsylvania, has a total value of over $44 billion when including debt. If the acquisition goes ahead, it would exceed the year’s largest deal to date — Mars Inc.’s $36 billion purchase of Kellanova, which was announced in August.
For any potential takeover to move forward, the Hershey Trust Co. would need to approve the deal. The trust controls nearly all of Hershey’s Class B stock, which carries around 80% of the voting rights in the company. However, the trust has been gradually selling off its shares as part of an effort to diversify its portfolio. If the trust were to back the acquisition, it could pave the way for other potential buyers to express interest in Hershey, according to the sources.
This move by Mondelez to acquire Hershey highlights the growing consolidation within the food and beverage industry, as companies look to expand their portfolios and strengthen their positions in key markets.