Beloved candy brands at risk of total elimination if Hershey is bought by Oreo and Cadbury-owner Mondelez, expert warns

Hershey might be acquired by MONDELEZ, the company that owns Oreo and Cadbury, in a billion-dollar transaction that would combine the two massive candy companies.

If the purchase goes through, popular candy and snack companies may be removed, but there is some good news for those who enjoy sweets.

According to Bloomberg, Mondelez International is thinking about purchasing rival The Hershey Company in a possible transaction that would establish a massive confectionery manufacturer with combined sales of around $50 billion.

Major food brands like Oreo, Cadbury, Chips Ahoy, Ritz Crackers, Wheat Thins, and Sour Patch Kids are owned by Mondelez.

Another well-known name in the food industry is Hershey, which owns the KitKat, Reese’s, Twizzler, Jolly Rancher, and Ice Breakers brands.

One of the biggest candy firms in the world would be created if the transaction were to proceed.

The bigger of the two candy behemoths, Mondelez, made contact with Hershey, but Bloomberg explained that there is no guarantee that talks will result in a merger.

This is not the first time Mondelez has considered buying Hershey.

The latter confectionery company, which was founded by Milton Hershey in 1894, turned down a $23 billion approach from Mondelez in 2016.

The company was a desirable takeover target because Hershey’s shares had dropped by about 6% in the year prior to the Bloomberg story.

Concerns regarding the increasing use of GLP-1 medications and the rising cost of cocoa negatively impacted the company’s financial outlook.

Due to increasing inflation, consumers are reducing their discretionary spending and watching their calorie intake by buying less unhealthy foods and snacks, which has also had an impact on Hershey’s sales.

Significant acquisitions in the confectionery industry have been made as a result of these changes; in August, Mars paid about $36 billion to acquire Kellanova.

SNACK ATTACK

The candy and snack food industries may be significantly impacted by Mondelez’s uncertain acquisition of Hershey.

The U.S. Sun spoke exclusively with Mitchell Olsen, a retail-focused marketing professor at the University of Notre Dame in South Bend, Indiana, to learn more about the possible merger.

According to the expert, Mondelez’s second attempt to acquire Hershey’s was expected given Mars’ acquisition of Kellanova this summer.

He added that both snack giants would gain from the possible acquisition by having greater “breathing room.”

A single company with a “larger, more diversified product portfolio that will be less impacted by price swings on any given commodity, such as cocoa,” he said, would result from the acquisition.

Olsen also foresaw that a purchase of this magnitude would have unintended consequences for some of the well-known brands of Hershey’s and Mondelez.

He clarified that management would have to reevaluate the “strategic importance” of each individual brand as a result of merging the brand portfolios of the two organizations.

“While some popular brands would be highly prioritized and benefit from the two companies’ combined resources and expertise, other beloved brands may subsequently be perceived as somewhat redundant within the newly expanded portfolio and could be sold off or otherwise eliminated,” he stated.

Olsen noted that while some beloved brands would suffer, an acquisition might result in improvements for the food sector.

“If the deal goes through, it could be a win for consumers hungry for innovative new products and unique collaborations between the two companies’ iconic brands,” he stated.

Changes in the food industry have been covered by the U.S. Sun before.

A new frappe flavor has been introduced by McDonald’s in response to a surge of malfunctioning equipment.

An employee of Trader Joe’s also disclosed that a well-liked coffee flavor is permanently gone, and “staff were surprised too.”

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