Hershey's shares surge as Cadbury parent explores acquisition
What's the story
Hershey, the famous American chocolate maker, has seen a huge jump in its share value.
The company's stocks have jumped by more than 10% after reports of a possible acquisition by Mondelez International, the parent company of UK-based Cadbury.
Mondelez has started early talks over the possible merger, anonymous sources told Bloomberg.
Merger impact
Potential merger could create a snack food behemoth
If the rumored merger comes to fruition, it could create a snack food giant with annual sales close to $50 billion.
Last week, Mondelez's market cap was about $84 billion and Hershey was valued at $35 billion.
This isn't the first time Mondelez has expressed interest in acquiring Hershey.
In 2016, Hershey had rejected a $23 billion takeover bid from Mondelez.
Deal approval
Hershey Trust's approval crucial for any potential deal
Any potential deal between Mondelez and Hershey would need the approval of the Hershey Trust Company, a charitable trust that controls the voting rights of the business.
The trust owns almost all of Hershey Co.'s Class B stock, giving it roughly 80% of the company's voting rights.
Lately, it has been slowly selling off some of its shares to diversify its holdings.
Brand unification
Merger could unite popular confectionery and snack brands
A Hershey-Mondelez merger could combine some of the world's most popular confectionery and snack brands.
Hershey is known for products such as Hershey's Kisses, Reese's Peanut Butter Cups, and recently added Sour Strips to its sweets portfolio.
Mondelez, on the other hand, owns popular brands such as Cadbury, Ritz crackers, Oreo biscuits, and Toblerone chocolate.