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Mondelez drops merger plans with Hershey
[WASHINGTON] US industrial snacks giant Mondelez International said Monday it had dropped plans to merge with chocolatier The Hershey Company.
The announcement came nearly two months after Hershey, the maker of Reese's Peanut Butter Cups and Hershey's Kisses, rejected a US$23 billion takeover offer from Mondelez.
"Following additional discussions, and taking into account recent shareholder developments at Hershey, we determined that there is no actionable path forward toward an agreement," Mondelez said in a statement, adding that executives were "disappointed."
The merged company would have overtaken Mars as the world's largest candy purveyor.
In June, the Hershey board of directors said it had "carefully reviewed" a bid of US$107 per share for the company and found it offered "no basis for further discussion." Hershey had in 2002 also rejected a US$12.5 billion takeover offer from Wrigley, which is now a unit of Mars.
Founded in 1984 by Milton Hershey, the Hershey Company is an iconic American brand controlled by a family trust which overseas charitable funds.
The Deerfield, Illinois-based Mondelez, formerly known as Kraft Foods, also produces popular lines of sweets, including Oreo and Chips Ahoy! cookies.
After closing regular trade up 0.7 per cent prior to the announcement, Hershey shares tumbled 11.4 per cent in after-hours trade.
Mondelez shares, which closed flat, added 3.9 per cent in late trading.