New York: American chocolate giant Hershey
may join the fray to acquire UK confectionery maker Cadbury,
which is already facing a takeover attempt from Kraft Foods.
Hershey today said it was reviewing its options in this
regard, while reports suggested it might be joined by Italy's
Ferrero to rival Kraft's USD 16-billion bid for Cadbury.
"Hershey confirms that it is reviewing its options and at
this stage there can be no assurance that any proposal or
offer from Hershey will be forthcoming," it said in a
regulatory filing.
"A further announcement will be made in due course if
appropriate," Hershey added.
The statement followed a report in business daily The Wall
Street Journal that Hershey was considering a offer of its own
or may team up with Ferrero to launch a rival bid to Kraft
Foods's offer.
The report cited unnamed sources as saying that Hershey
was talking to banks to line up "billions of dollars for
acquiring Cadbury."
Attributing to one person familiar with the matter, the
report said, Hershey's chief executive David West in the last
two weeks has spoken with Ferrero bankers at least twice about
teaming up to buy Cadbury.
The report said that discussions are in "preliminary
stages" and financial specifics have not been discussed.
Meanwhile, Hershey has recently talked to JP Morgan Chase
and Bank of America Merrill Lynch about financing and found
the banks receptive, the WSJ report said.
Kraft formally offered November 9 to purchase Cadbury for
about USD 16 billion, while maker of Dairy Milk rejected the
offer describing as "derisory."
The WSJ said, for Hershey, combining with Cadbury could
help substantially build sales outside North America and give
the company access to faster-growing gum and candy markets. It
could also help Hershey's to tap into Cadbury's well
established networks in emerging markets such as India and
Latin America.
For Ferrero, Cadbury would offer a potentially sweet
platform in the chocolate-loving British market. Compared with
Kraft, the family-owned Ferrero is small, with annual sales of
USD 9 billion to Kraft's USD 42 billion.
Ferrero's brands are popular around the world, while
Ferrero's sales are concentrated in Germany, Italy and France.
A link-up with Hershey and Cadbury could expand Ferrero's
reach, the report said.
Bureau Report
First Published: Wednesday, November 18, 2009, 21:53