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Business

Mondelez makes takeover bid for Hershey

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Business

Mondelez makes takeover bid for Hershey

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COMING UP:Mondelez makes takeover bid for Hershey

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00:00:01
>> Mondelez is stalking Hershey's. It's made a bid of about $107 a share. That's almost $25 billion. I'm Rob Cox with Reuters Breaking Views. This is a fascinating deal. These companies kinda belong together because Mondelez, remember, bought Cadbury, the biggest British chocolate maker. A few years back, Hershey's tried to buy Cadbury.
00:00:21
It realized it didn't have the money. Now you've got this opportunity by Irene Rosenfeld, who runs Mondelez, to crunch the two of them together. But it's gonna be a pretty sticky deal for a couple reasons. First of all, the company is actually controlled by a trust. The trust is the Milton Hershey Trust, named after the Mennonite in Pennsylvania who founded the company.
00:00:41
And basically, this makes it really hard, they own controlling shares in the company. And not only that, the state of Pennsylvania, way back when, when Wrigley, remember the chewing gum maker, tried to buy Hershey's. State of Pennsylvania tried to block the deal. But what Mondelez may realize is that there's been a scandal at the board of the Hershey trust.
00:01:02
So lot's of problems there. There's been accusations of insider trading, so there's a whole bunch of scandal. I get the sense that maybe Irene Rosenfeld knows she's got a sweet opportunity right now to take this company over. So if Irene Rosenfeld manages to get Hershey's to the table, and merge these two companies, she's gonna be a top a $100 billion confectionary conglomerate.
00:01:28
That's pretty much the biggest in the world. That bests Mars, it bests Wrigley. It gives them huge opportunities around the world to sell chocolates and gum. Not surprisingly, Hershey shares bumped right up, they're up about 15 to 18 percent during the day. That's actually higher than the $107 per share that's out there.
00:01:48
That's mainly because we know that this is just the starting point for negotiation.