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Hershey rejects takeover offer from Mondelez

Deerfield-based Mondelez International is making a bid to acquire Hershey Co., a deal that would create the world's largest candy maker.

But the maker of the iconic chocolate candy bar said Thursday its board has unanimously rejected a takeover offer and that the offer provided "no basis for further discussion."

Hershey confirmed that it had received the preliminary offer from Mondelez International to be taken over for a mix of cash and stock consideration, totaling $107 a share of Hershey common stock.

The Wall Street Journal, citing sources it did not name, reported earlier in the day Mondelez sent a letter to Hershey expressing interest earlier this month, Hershey, based in the Pennsylvania town of the same name, has a market value of about $25 billion.

The two companies have been talking in recent months, but no deal has been reached, the person told the newspaper, asking not to be identified as the information is private.

Acquiring Hershey would balance the portfolio of Oreo maker Mondelez, which also owns Cadbury chocolates, Trident gum, Nabisco cookies and Ritz crackers. While the brands have a presence in the U.S., most of Mondelez' business is focused overseas. Hershey generated almost 90 percent of its revenue in North America last year, with the majority of that coming from selling chocolate in the U.S.

The acquisition of Hershey would give the combined company 18 percent of the global candy market and make it the industry's largest player, according to Euromonitor International. Mars Inc., which makes M&M's and Snickers, is currently No. 1 with 13.5 percent of the market.

A spokeswoman for Mondelez, Valerie Moens, told Associated Press the company does not comment on "market rumors or speculation."

The Journal reported Mondelez pledged to maintain jobs and move the combined company's headquarters to Hershey. The new business also would take the Hershey name, the newspaper said.

Mondelez, which split from Kraft Foods in 2012, was set up to focus on faster-growing emerging markets. The global slowdown has dealt the company a blow in recent years and made the U.S. market look more attractive.

But Hershey faces its own challenges. It's suffering from a cutback in sugar consumption by Americans, prompting it to push deeper into foods like beef jerky. The company's troubles have made it more of a takeover target, analysts say.

The deal would be subject to the approval of the Hershey Trust, created by the family of the company's founder. The trust owns 8.3 percent of Hershey's shares, according to FactSet.

"They control the company," said Bloomberg Intelligence analyst Ken Shea. "If it's a friendly deal, presumably they'll have the trust on board."

Associated Press also contributed to this report.

At a glance

MONDELEZ INTERNATIONAL INC.

BRANDS: Oreo and Chips Ahoy cookies; Cadbury and Toblerone chocolates; Ritz and Triscuit crackers; Trident and Stride gum.

EMPLOYEES: About 99,000 at the end of last year.

HEADQUARTERS: Deerfield

THE HERSHEY CO.

BRANDS: Hershey's Kisses; Reese's Peanut Butter Cups; Ice Breakers mints; Jolly Rancher and Twizzlers candies; Krave beef jerky.

EMPLOYEES: About 20,700 at the end of last year.

HEADQUARTERS: Hershey, Pennsylvania

Source: Associated Press

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