That’s according to a report Monday (Dec. 9) by Bloomberg News, citing sources familiar with the matter. The takeover, assuming it proceeds, would create a mammoth food company with total sales of nearly $50 billion, the report said.
Sources said Mondelēz has made a preliminary approach about the deal. PYMNTS has contacted both companies for comment. Mondelēz declined to comment, and Hershey has not sent a reply.
Bloomberg noted that this isn’t Mondelēz’s first attempt to acquire Hershey, having made a $23 billion bid ultimately rejected by the chocolate company in 2016.
Hershey is worth $45 billion, the report added, meaning that this deal would exceed this year’s largest: snack maker Mars’ agreement to buy Kellanova for almost $36 billion.
Mondelēz’s brands include Ritz, Oreo and Cadbury. The company, Bloomberg said, is “receptive to acquisitions” and has the debt capacity for M&A, Bloomberg Intelligence analysts wrote in September.
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Mondelēz made another high-profile acquisition earlier this year, purchasing a majority stake in Evirth, a Chinese cake and pastries manufacturer.
“We remain focused on reinvesting behind our brands, driving distribution, expanding our capabilities and maintaining cost discipline,” CEO Dirk Van de Put said in the company’s earnings release in October.
“We continue working to accelerate our core business while strategically reshaping our portfolio — for example, through our expanded partnership with Evirth, a leading manufacturer of cakes and pastries in China,” he added. “We are excited about the opportunity to further leverage our iconic brands and distribution to create more premium offerings in the fast-growing cakes and pastries space.”
The Bloomberg report also pointed out that the packaged food sector has been dealing with dwindling volumes, tepid growth and weaker consumer demand, as shoppers wrestle with price hikes and become more conscious of their health. These, Bloomberg argued, are trends that could lead to more industry consolidation.
In other Mondelēz news, the company recently wrapped the first phase of a blockchain-focused partnership with digital payments company SKUx and open source enterprise distributed ledger technology (DLT) network Hedera.
“The first phase of the innovation project successfully expands upon the current SKUx and Mondelēz customer service program in-market, which was designed to enhance consumer offer experiences by adding a near real-time, SKUx digital payment option alongside coupons, mailed paper checks, and vouchers,” the companies said in a news release in October.
