Hershey and Ferrero mulling over joint bid for Cadbury

Following the hostile bid from Kraft Foods, British confectioner Cadbury is now reported to be facing a joint bid from US giant Hershey Co in partnership with Italy’s confectionery group Ferrero.

According to reports, the two companies have been in secret talks “for weeks” about making the alliance.

A source close to the situation said yesterday that discussions between the two sides were “very early in the process” and financial details have not been discussed and no offer has been made.

While Cadbury’s is not up for sale, it said it has not been contacted by Ferrero but added “it would give proper consideration to any offer that valued it properly and would be of interest to shareholders.”

Last week, US food giant Kraft made a second bid for Cadbury which was described by chairman Roger Carr as “derisory”.

Hershey is the largest chocolate maker in the US and is controlled by the charitable Hershey Trust, which would have to approve a bid before discussions go any further. It makes the well-known Hershey bar and Hershey’s Kisses.

Cadbury, which is the world’s second-largest confectionery company after Mars-Wrigley, is renowned for Dairy Milk chocolate andowns the Green & Black’s chocolate brand, Halls lozenges, Trident and Dentyne gum brands and liquorice allsorts maker Bassett’s.

Ferrero, which makes Nutella chocolate spread and Ferrero Rocher chocolates, has a workforce of more than 21,600 and has annual sales of €6.2 billion.

Discuss this in the Finance Markets forums

Story link: Hershey and Ferrero mulling over joint bid for Cadbury