Thursday, June 30th was quite a day. I had a full schedule that suddenly got fuller with media calls about an offer by Mondelez International to buy the Hershey Company. Speculation was running rampant from The Wall Street Journal, who broke the story, to ABC27, WGAL, and PennLive and everything in between. We had calls from television stations and messages from print/electronic outlets asking the Chamber’s position on a merger. For the record, we didn’t think it was a good idea.
However, contrary to popular belief we don’t have media ready position statements on all conceivable iterations of every single large company deal, so what went in to that immediate response? Let’s just hold there for a moment and take a look, to the extent possible behind the curtain, at this deal as we did on June 30th. (If this were an old TV western, you would hear “meanwhile, back at the ranch” at this point.)
First, who is Mondelez International? I admit, I didn’t know. When I found out, the easiest explanation is: just think Kraft food snacks, with Nabisco, Cadbury and a few other well-known brands brought together a few years back under a new name when Kraft spun off its snack food division. According to the Chicago Tribune, home state newspaper to Mondelez, the name is a mash up of Latin words for world and delicious, a symbolic name chosen by employees. Ah, what’s in a name, an Oreo (Mondelez) by any other name would taste as good!
Mondelez is one of the world’s largest makers of snacks, including confectionery items. Many of its brands can trace their history back to the days of Milton Hershey, the beginning of the 20th century with individual stories of entrepreneurial successes. The interesting thing in the acquisition offer, Mondelez offered to keep the Hershey Company name (of course choosing between Hershey and Mondelez is a no-brainer!) and keep the headquarters in Hershey. Hershey, one of the best brands in world, that many claim is second only to Coca-Cola in worldwide brand strength.
So the offer included keeping the Hershey name, remaining headquartered in Hershey and creating the world’s largest confectionery company, so we got that going for us! The offer was $23 billion to create the world’s largest candy maker at about $107 per share, which caused Hershey Company stocks to rise to over $113 per share on June 30. So we also have that going for us too.
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