Mondelez, the global snack giant behind Oreo and Cadbury, is reportedly in preliminary talks to acquire Hershey Company, a move that could create one of the world’s largest candy companies.
Shares of Hershey (HSY) surged nearly 15% in midday trading Monday after Bloomberg reported Mondelez’s approach. While both companies declined to comment on “market rumors and speculation,” the discussions have fueled anticipation of a potential blockbuster deal.
A Sweet Union of Global Brands
A merger would combine two of the most iconic confectionery players. Mondelez owns beloved brands like Oreo, Cadbury, Ritz Crackers, and Sour Patch Kids, while Hershey’s portfolio includes KitKat, Reese’s, Jolly Rancher, and its flagship Hershey’s chocolate bars.
Strategic Advantages:
- Enhanced purchasing power in the costly cocoa market.
- Strengthened North American market presence via Hershey’s dominant position.
- Potential for European expansion leveraging Mondelez’s global network.
“Hershey brings strong operational capabilities and great brands, making this a compelling opportunity for Mondelez,” said Randal Kenworthy, consumer and industrial product lead at West Monroe.
Health and Inflation Drive Mergers
Health-conscious consumers cutting back on sugary snacks and high inflation have pressured snack companies, pushing industry players toward consolidation. Recent examples include Mars’ nearly $30 billion acquisition of Kellanova.
Before the reported talks, Hershey’s stock had fallen 10% this year, positioning it as an attractive target, analysts said.
Challenges Ahead
This is not the first time Mondelez has pursued Hershey. A 2016 bid worth $23 billion was rejected, with the Hershey Trust—holding the majority of voting shares—playing a key role in blocking the sale.
For any potential deal to succeed, Mondelez will likely need to gain approval from the Trust, which has historically been protective of Hershey’s legacy.
While there is no certainty that discussions will lead to a deal, the potential merger highlights ongoing shifts in the snack and confectionery market as companies seek to adapt to changing consumer habits and economic conditions.
