Reports that Mondelez International has launched a takeover bid for Hershey sent shares in the US chocolate maker up by as much as 21% in morning trade in New York today (30 June).
According to The Wall Street Journal, Mondelez sent an expression of interest to Hershey earlier this month. Terms of the offer remain unknown but, according to the WSJ, Mondelez promised to maintain jobs and relocate the combined group’s head quarters to Hershey’s namesake town in Pennsylvania. The business would also take the Hershey name, the report added.
These concessions are thought to have been made to win over the support of Hershey’s majority owner, The Hershey Trust. The Trust’s majority stake has long been viewed as a roadblock to any potential takeover of the US Reese’s Pieces maker.
Hershey has a market value of approximately US$25bn and a merger would create the world’s largest chocolate maker.
The report sent Hershey shares skyrocketing as high as $117.78 today.
Representatives for Mondelez and Hershey did not immediately respond to request for comment.