- "Willy Wonka and the Chocolate Factory"
- "Hersheys Best Loved Recipes"
- "The Emperors of Chocolate : Inside the Secret
World of Hershey and Mars"
- "Milton Hershey : Chocolate King, Town
- "Charlie and the Chocolate Factory"
By Kimberly Powell
Dateline: August 29, 2002
At Issue: Hershey
Foods Corp., under pressure from the charitable trust that controls 77 percent
of its voting stock and 31 percent of common stock, is exploring a possible sale
of the company. The board of the Milton Hershey School Trust has decided to sell
the nation's largest candy maker as a way of diversifying their $5.7 billion
portfolio to protect its assets. Hershey's offer to buy back the stock was
rejected by the trust. The potential deal is one that industry experts think
will be valued between $10 billion to $13 billion.
Hershey Foods Corp., founded in 1894 as
the Hershey Chocolate Company, is North America's leading manufacturer of
chocolate and non-chocolate confectionary and chocolate-related grocery
products. Some of their most well-known chocolate brands include Hershey Kiss,
Almond Joy, and Reese's Peanut Butter Cups.
Milton Hershey School
Trust was established in 1909 by Milton S. Hershey, founder of Hershey
Chocolate, to provide for the health, education, and welfare of orphaned boys.
The Milton Hershey Trust School
currently provides free education, career training, housing, clothing, meals
and medical/dental care to over 1,200 financially and socially needy boys and
girls each year.
Hershey, Pennsylvania, affectionately
known as Chocolate Town, USA, has three main employers: the Hershey chocolate
factory, the Penn State Milton S. Hershey Medical Center, and Hershey
Entertainment & Resorts Co., which manages Hersheypark, and other tourist
attractions. The Hershey chocolate factory, situated near the corner of
Chocolate and Cocoa Avenues, employs almost 7,000 local employees. A new buyer
could eliminate operations and slash jobs, scary news to this small,
close-knit community. What would Hershey, a town where Hershey kisses adorn
the lampposts and the sweet smell of chocolate fills the air, be without its
PA Attorney General Mike
Fisher filed a court motion on August 23, 2002, seeking a temporary
restraining order to halt any potential sale of Hershey Foods Inc., saying the
central Pennsylvania community would suffer irreparable harm if a sale were
reached. In addition, Fisher is drafting legislation that would require Milton
Hershey trustees to consider the impact of any sale on the Hershey community,
not just choose the highest bid for the company. The potential sale of Hershey
could have far reaching implications on Fisher's campaign for the Pennsylvania
governor's office. It can't be good for an Attorney General and potential
governor to be seen as losing companies and jobs for the state and its
Nestle Foods is rumored to be
considering a top-dollar bid for Hershey, a rumor fueled by frantic press
speculation. On Monday, USA Today quoted unnamed sources as saying that Nestle
had presented a preliminary bid of $82 to $85 a share, which helped push
Hershey shares up 2.36 percent. News leaks about the possible offer have made
Nestle, the world's largest food group "furious," as it sees them as an
attempt to push up the price of any Hershey acquisition. Nestle is also thought to be
interested in Pfizer Inc's Adams unit, which makes everything from Certs Mints
to Trident gum, and says it wants back its U.S. KitKat business, currently
made under license by Hershey, no matter who takes over Hershey Foods.
Kraft Foods has also asked for and
received information about Hershey's finances, according to the
Financial Times. Kraft is expected
to be a front runner in a bidding war, along with Nestle, if legal arguments
over the sale of the Hershey chocolate company are resolved at a hearing on
Cadbury Schweppes is
another possible bidder, though Reuters has reported that they are leaning
toward bidding only for any Hershey brands that might be divested, and
concentrating on the Adams sale instead.
Any Hershey deal will likely not happen anytime
soon because of U.S. political opposition to a deal and likely antitrust issues.
A combined Nestle-Hershey business, for example, would control more than 50
percent of the U.S. chocolate confectionery market. And, on the sweet side, some
people have expressed the concern that the company that
buys Hershey could change the candy we've all been eating for years. Time to
stock up on Hershey's kisses!
Kimberly & Albrecht Powell. Licensed to
About.com. All Rights Reserved.