fbpx

Hershey merger speculation follows rivals’ deal

Two rivals of The Hershey Co. this morning announced a merger, prompting Wall Street to
speculate that the local candymaker could be forced into a deal of its own.

Two rivals of The Hershey Co. this morning announced a merger, prompting Wall Street to
speculate that the local candymaker could be forced into a deal of its own.

Virginia-based Mars Inc. announced it agreed to acquire
Chicago-based Wm. Wrigley Jr. Co. in a deal valued at about $23 billion.

Investors pumped up Hershey stock more than 4 percent, to $36.22,
as of 11:30 a.m.

Today’s news makes it more likely that Hershey and London-based
Cadbury Schweppes will move ahead with merger talks, Credit Suisse analyst
Robert Moskow wrote today in a note to Wrigley investors.

Moskow
predicted that speculation of a Hershey/Cadbury
deal would drive up Hershey stock today. The same prediction came from Terry
Bivens, a Bear Stearns analyst.

Bivens called the Mars-Wrigley
deal a strategic no-brainer.

“A combined company would be a confectionary powerhouse not
only in the U.S….but also around the world,” Bivens wrote.

But Bivens was skeptical about a potential Hershey/Cadbury agreement.
It would take years before Hershey Trust Co., which controls Hershey, would agree
to sell the candymaker, Bivens wrote. A
deal in which Hershey was the buyer could dilute Hershey’s earnings per share
significantly, Bivens wrote.

Hershey Trust forced Hershey to explore a sale in 2002,
prompting a firestorm of protest. The trust eventually dropped the sale.
Wrigley was among the bidders for Hershey.

Hershey shares are traded on the New York Stock Exchange under the ticker symbol HSY.

Business Events

Game Changers

Monday, November 02, 2020
Game Changers

Real Estate & Development Summit

Tuesday, November 10, 2020
Real Estate & Development Summit

2020 Human Resources Summit

Thursday, November 12, 2020
2020 Human Resources Summit

Best Places to Work in PA

Thursday, December 03, 2020
Best Places to Work in PA