Mondelez Abandons Hershey’s Takeover Bid
30 Aug 2016 --- Mondelez International has snubbed a potential takeover of US chocolate giants Hershey after discussions have broke down. The company behind the likes of Oreo, LU and Nabisco biscuits as well as Cadbury, Milka chocolate and Trident gum, had proposed to create the largest confectioner in the world with a merger between the two iconic US companies.
Mondelez CEO and chairman Irene Rosenfeld says that although the company is disappointed, she concludes there is no “actionable path forward” on an agreement after its US$23 billion offer was rejected.
"As the world's leading snacking company, we remain focused on successfully executing our strategy to deliver both sustainable top-line growth and significant margin expansion and are well-positioned to continue to deliver value to our shareholders," she says.
“Our proposal to acquire Hershey reflected our conviction that combining our two iconic American companies would create an industry leader with global scale in snacking and confectionery and a strong portfolio of complementary brands. 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, with 2015 net revenues of approximately US$30 billion, will update its investors at the forthcoming Barclays Global Consumer Staples Conference on September 7.
“While we are disappointed in this outcome, we remain disciplined in our approach to creating value, including through acquisitions, and confident that our advantaged platform positions us well for top-tier performance over the long term,” adds Rosenfeld.
Meanwhile Mondelez International is expanding its Cocoa Life program in Indonesia following the completion of the first .jpg)
phase of its new partnerships with Swisscontact, Cargill and Wahana Visi Indonesia to develop sustainable livelihoods for cocoa farming communities in southeast Sulawesi.
Partly funded by the Swiss State Secretariat of Economic Affairs (SECO), the program promotes and encourages young people and women to get involved in sustainable cocoa production and wants to create the next generation of farmers in the region’s cocoa sector. Cocoa Life communities have developed Community Action Plans (CAPs) and set up committees with representatives from all relevant groups in the community, including women and young people.
The idea is for these committees to implement the CAPs which feed into village plans and help communities apply and receiving government funding and support. Cocoa Life also provides training to increase awareness of social issues and helps communities in taking action for positive change and developing their own action plans.
Mondelez International is part of the consortium led by Swisscontact, which together with the Millennium Challenge Account-Indonesia, announced in April 2015 the Green Prosperity — Sustainable Cocoa Production Program (GP-SCPP), which aims to reduce poverty and greenhouse gas emissions in the Indonesian cocoa sector.
"Cocoa Life is taking root in Indonesia because it's focused on farmers," said Andi Sitti Asmayanti, Director of Cocoa Life for Southeast Asia. "Through Cocoa Life, we're empowering farmers to create action plans with their communities and shape the future of cocoa. It's important that community members come together to build plans that are based on their long-term needs. This creates ownership and empowerment. Together with our partners and the Indonesian government, we're helping cocoa-farming families create the kind of communities they want to live in, and inspiring the next generation."
Swisscontact is working with partners Wahana Visi Indonesia and Cargill on a three-year program to reach 6,000 cocoa farmers and at least 16,000 community members in Southeast Sulawesi, whilst the collaboration with Cargill focuses on improving agricultural and environmental practices.
"This partnership brings proven experience in community mobilization to SCPP's experience in supply chain development and strengthens the ability of cocoa farmers to shape their future," said Manfred Borer, country director, Swisscontact Indonesia. "By promoting open participation in community meetings, community members that are often overlooked will be given a platform to promote their ideas for community development."
