Auction Price Pegged at About $15 Billion

By Published on .

Most Popular
NEW YORK (AdAge.com) -- The Hershey Trust Co., which controls roughly one-third the equity and three-quarters of the voting power of Hershey Foods, said today it will explore the possible sale of the candy marketer.

The Trust said the decision comes not from its dissatisfaction with company management, including new President-CEO Rick Lenny but its interest in diversifying the assets of the Trust, which is the trustee of the Milton Hershey School for needy children.

Auction price
Merrill Lynch analyst Leonard Teitelbaum said the possible auction would be likely to fetch a transaction value of $13 billion to $15 billion, making it the largest food company acquisition since Kraft Foods purchased Nabisco for $14.9 billion.

Because of Hershey's 31% share of the U.S. confectionary market, "companies such as Kraft, Nestle, PepsiCo and Cadbury-Schweppes could possibly be among the bidders of the potential Hershey sale in order to gain leadership in the U.S. snack market," Mr. Teitelbaum said.

In this article: