Peter Brabeck, chief executive of Swiss good giant Nestlé, is reported to have said the fears antitrust authorities would prevent it buying Hershey Foods, the US confectioner that has put itself up for sale.
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Nestlé has been tipped as the most natural buyer of Hershey, which is expected to go under the hammer for as much as US$12bn. It is widely known that the Swiss company has the necessary funds, and is also keen to regain US distribution rights to its KitKat brand, currently held by Hershey.
However, Brabeck is reported to have said that he doesn’t think competition regulators would allow it to buy Hershey whole. He believes the Federal Trade Commission would block such a deal on antitrust grounds. Hershey accounts for 43% of the US chocolate market, while Nestlé has 12% behind Mars’ 27%. “It’s fantasy to think that you would get regulatory approval in the U.S. to combine 43% with 12%,” Brabeck is reported as saying.
Brabeck further expressed concerns about the potential price being bandied around, although he refused to be drawn on whether the deal could be structured in a way that would secure antitrust approval.
Other potential buyers for Hershey include Kraft and Cadbury, with Wrigley occasionally mentioned as a wild card.
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By GlobalDataMeanwhile. the local press in Pennsylvania is reporting that the trust behind Hershey Foods may simply sell shares to the public to reduce its holding of it cannot find an outright buyer.
The report, which appeared in the Patriot-News earlier this week, quoted a source close to the trust as saying a public offering would be on a list of events that could happen if it fails to sell the company. The source said the trust company is still committed to the sale.
