Hershey’s targeted by Mondelez, the candy giant who ‘betrayed the heritage’ of a classic chocolate brand

Mondelez International, the maker of Oreo cookies and Ritz crackers, is reportedly eyeing a takeover of iconic US chocolate maker Hershey.

The a potential blockbuster deal, first reported by Bloomberg this morning, that could create a $50 billion snack powerhouse.

According to sources close to the matter, the Chicago-based snack giant has made a preliminary approach to Hershey, famous for its Kisses and Reese’s Peanut Butter Cups. 

Mondelez, valued at $84 billion, is keen to combine forces with Hershey, which has a market worth of about $35 billion.

But the company – then known as Kraft –  faced the wrath of Cadbury‘s chocolate fans after the takeover of the British brand.

Mondelez International is a spin-off of US giant Kraft Foods, which bought out Cadbury’s in 2010. The firm was established in Britain in 1824 by John Cadbury. 

A string of complaints including changing the recipe of the brand’s iconic Crème Eggs, shrinking bars, bizarre new recipes, and job losses. 

It led to claims that Cadbury had ‘betrayed its heritage’ after the takeover, according to a 2016 TV documentary from the respected Dispatches series.

Mondelez, valued at $84 billion, is keen to combine forces with Hershey, which has a market worth of about $35 billion. The deal would create one of the world’s largest confectioner.

This isn’t Mondelez’s first attempt to woo Hershey. Back in 2016, the company walked away after its $23 billion bid was rejected. 

But with the packaged-food industry facing sluggish growth and changing consumer habits, the stakes are higher than ever for consolidation.

If successful, the acquisition would top this year’s largest deal – Mars’ $36 billion purchase of Kellanova. Its brands include Pringles, Carrs and Special K.

But the road to a takeover isn’t easy: any deal would need approval from the Hershey Trust, which holds 80 percent of the company’s voting power.

Hershey shares have slipped 6 percent this year, and the company has been battling sky-high cocoa and sugar costs. 

After Bloomberg’s report, shares of Hershey rose 17 percent, while those of Mondelez were down about 4 percent. 

CEO Michele Buck recently slashed the company’s sales outlook as cash-strapped consumers tighten their belts.

Both Mondelez and Hershey have remained tight-lipped, with no official comments on the deal speculation.