NEW YORK: Shares of Hershey are soaring after a report that it could be taken over by Oreo cookie maker Mondelez International.
The Wall Street Journal, citing sources it did not name, reported Thursday that Mondelez recently sent a letter to Hershey proposing the deal. A takeover would bring together two of the world’s largest snack and candy makers. Mondelez said it would locate the headquarters of the combined company in Hershey, Pennsylvania and take on the Hershey name, according to the Journal.
The Hershey Co.’s stock was up 15 percent at $112.34 in midday trading.
A spokeswoman for Mondelez, Valerie Moens, said in an email that the company does not comment on “market rumors or speculation.” A representative for Hershey did not respond to a request for comment.
Mondelez International Inc., based in Deerfield, Illinois, also owns Cadbury chocolates, Nabisco cookies and Ritz crackers. The company split from Kraft Foods in 2012, taking brands that were seen as having international appeal and bigger growth potential.
A tie-up between Mondelez and Hershey would mark the latest chapter in a series of deals in the packaged food industry, with companies looking for ways to improve their financial results while up against struggling sales growth in major markets such as the U.S. When Heinz announced plans to buy Kraft last year, for instance, executives cited the cost savings that would be achieved by combining manufacturing and distribution networks.
Later this year, ConAgra Foods also plans to split into two publicly traded companies. One will hold onto branded products such as Slim Jim and Healthy Choice, while the other will take the company’s Lamb Weston frozen potato business that supplies to restaurant chains and foodservice.