Blog: Dean BestCadbury, not Nestle, is the sweeter option for Hershey

Dean Best | 24 September 2008

Forget the talk about Hershey teaming up with Nestle. All that speculation has done is serve to illuminate – once again – just how good a fit the US confectionery giant would be with Cadbury, its UK rival.

The report in the UK's Daily Telegraph that talks between Hershey and Netsle had been held raised a few eyebrows. The paper claimed that Hershey had asked JP Morgan to work on a possible deal and that Nestle had been lined up as a potential buyer.

Hershey shares jumped on the news but it seems unlikely that a tie-up with Nestle is in the offing for the struggling US candy giant.

Firstly, there is the issue of competition in the US chocolate sector. A combined Hershey and Nestle would, according to some estimates, enjoy over 50% of sales across the Atlantic, enough to raise the hackles of their competitors and US regulators.

And, secondly, there has been the hitherto reluctance of Hershey's controlling shareholder, The Hershey Trust, to give up control of the business. Question marks hang over whether the Trust would cede control over Hershey.

The Trust's obstinacy has, according to some, prevented Hershey from joining forces with Cadbury, a deal long rumoured to be the next big transaction in a rapidly-consolidating sector.

And the rumours surrounding Nestle have again emphasised just how better a fit Cadbury would be for Hershey, not least because of the UK group's minimal presence in the US and its strong positions internationally.

Whether The Hershey Trust shares that view is another matter entirely.


BLOG

Vegan tourist tales

I sampled some of the products launched in the UK in the New Year, aimed at those seeking to eat more healthily or cut down on their meat consumption....

BLOG

"We're evolving" - flagship US lobby group insists change coming as more members quit

Hershey and Cargill are the latest US-based food majors to have decided to leave The Grocery Manufacturers Association - and the lobby group says it is looking to change to meet the "disruption" in th...

BLOG

Season's greetings from just-food

Seasonal greetings from our deputy editor and details of our operating schedule....

just-food homepage



Forgot your password?