Consumer packaged goods giant Mondelēz is reportedly eyeing a deal to acquire the renowned chocolate brand Hershey. This move, as reported by Bloomberg News on Monday (Dec. 9), has sparked significant interest in the industry. Sources familiar with the matter suggest that Mondelēz has made a preliminary approach regarding this potential transaction. PYMNTS has reached out to both companies for their comments, but Mondelēz declined to provide any, and Hershey has not sent a reply yet.

Historical Context of Mondelēz's Attempts

Bloomberg noted that this isn't Mondelēz's first foray into acquiring Hershey. In 2016, the company made a $23 billion bid for Hershey, which was ultimately rejected by the chocolate company. Hershey is currently valued at $45 billion, and this potential deal would surpass this year's largest acquisition, which was snack maker Mars' agreement to buy Kellanova for almost $36 billion.

Mondelēz's Brand Portfolio

Mondelēz boasts an extensive portfolio of brands including Ritz, Oreo, and Cadbury. According to Bloomberg Intelligence analysts, the company is "receptive to acquisitions" and has the financial capacity to engage in mergers and acquisitions. This year, Mondelēz made another high-profile acquisition by purchasing a majority stake in Evirth, a prominent Chinese cake and pastries manufacturer.CEO Dirk Van de Put emphasized in the company's October earnings release that they remain focused on reinvesting behind their brands, driving distribution, expanding capabilities, and maintaining cost discipline. He further added, "We continue working to accelerate our core business while strategically reshaping our portfolio, such as through our expanded partnership with Evirth, a leading manufacturer of cakes and pastries in China. We are excited about the opportunity to further leverage our iconic brands and distribution to create more premium offerings in the fast-growing cakes and pastries space."

The Impact of Industry Trends

The packaged food sector has been facing challenges such as dwindling volumes, tepid growth, and weaker consumer demand. Shoppers are grappling with price hikes and becoming more conscious of their health. These trends, as argued by Bloomberg, could potentially lead to more industry consolidation. In addition to the Hershey acquisition speculation, Mondelēz recently completed the first phase of a blockchain-focused partnership with digital payments company SKUx and open source enterprise distributed ledger technology (DLT) network Hedera. The companies stated in a October news release that the first phase of the innovation project successfully expanded the current SKUx and Mondelēz customer service program in the market, aiming to enhance consumer offer experiences by adding a near real-time, SKUx digital payment option alongside coupons, mailed paper checks, and vouchers.