Snacks giant Mondelez International
is abandoning its takeover bid for American confectioner Hershey after
its $23bn (£18bn) offer was rejected.
The deal would have created the world's biggest maker of confectionery, but Hershey turned down the cash and stock offer in June.
Hershey shares tumbled by as much as 12% in late US trading on the news. Mondelez shares rose by almost 4%.
Mondelez brands include Cadbury chocolate and Trident chewing gum.
Its
chief executive Irene Rosenfeld said the board was "disappointed with
the outcome" but had decided there was "no actionable path forward
toward an agreement".
"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," she said in a statement.
Trust issues
Hershey raked in nearly 90% of its revenue from North America last year, mostly from chocolate sales.
The
Pennsylvania-based company had reportedly looked for at least $125 per
share before agreeing to any takeover talks. Mondelez had initially
offered $107 per share.
Complicating matters further is Hershey's company structure.
The
maker of Oreos and Reese's peanut butter cups is majority-controlled by
the Hershey Trust, a charity which has prevented previous sales of the
company.
The Hershey Trust is revamping its board and management rules after coming under scrutiny for its spending practices.
The
changes at Hershey don't come into effect until next year and its
shareholders are said to have been averse to any transactions before
then.
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