Bloomberg Intelligence
Hershey's Main Owner Rejects Mondelez Offer
Dec 11, 2024
William Lee, Chief Economist at the Milken Institute, shares insights on the recent rejection of Mondelez's takeover bid for Hershey. He discusses the implications of U.S. CPI data, including its impact on inflation and personal finance strategies. The conversation covers the complexities of the Federal Reserve's inflation targets and the ongoing challenges in the housing market. Lee and the hosts delve into economic disparities and the importance of a skilled workforce, linking economic trends to broader fiscal challenges.
29:18
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Quick takeaways
- Hershey's rejection of Mondelez's low acquisition offer highlights complexities due to ownership structures and regulatory scrutiny affecting merger potential.
- Current inflation data reveals economic disparities, with essential services driving costs and indicating fragility impacting future consumer spending patterns.
Deep dives
Mondelez's Bid for Hershey's
Mondelez has made a bid to acquire Hershey's, but Hershey's management has rejected the offer as too low. In 2016, Mondelez attempted a similar acquisition, valuing Hershey's at $25 billion based on EBITDA multiples significantly higher than what is currently suggested. Factors such as the ownership structure, which sees a trust controlling 80% of Hershey, and scrutiny from regulatory agencies further complicate the potential deal. The snack food market is highly concentrated, which would intensify competition if the deal were to proceed.
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