Hershey Bids for Nestle in Effort to Solidify Hold on U.S. Chocolate Market
By Nick Malawskey firstname.lastname@example.org | Updated Jan 8 10:06 PM; Posted Jan 8, 6:07 PM
The following is an excerpt from www.pennlive.com
Could Butterfinger and Baby Ruth candy bars be joining the shelf of Hershey's chocolates? The Hershey Co. has emerged as one of two leading bidders for Nestle SA's American confectionary business.
The news of Hershey's bid comes a few weeks after the Derry Township-based snack company announced plans to buy Amplify Snack Brands for $921 million, the largest acquisition deal in Hershey's history.
While the Amplify purchase is largely seen as a bid to diversify Hershey's snacking portfolio, the addition of Nestle's brands would solidify Hershey's dominant hold on the U.S. chocolate market.
Nestle's US business is valued between $2 and $2.5 billion -- and, if Hershey was able to close the deal, it would be the largest yet for the iconic chocolate company, and would allow it to control a wide swath of the U.S. chocolate market.
One key factor driving Hershey's interest in Nestle is probably scale, said Jeff Roof, founder and president of the Roof Advisory Group in Harrisburg. The potential acquisition of Nestles U.S. business is a way for Hershey to expand "both in products but also at higher profitability as well," he said.
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