Remember the book The Chocolate War? It's happening again, though this time the ramifications are looming far larger than poor Jerry Renault's refusal to participate in his school's chocolate-sale fundraiser.
With Hershey Foods
Reports that first broke in the British press over the weekend now have Cadbury Schweppes
The sale of Hershey isn't exactly news. The company announced its intentions in March, when Milton Hershey's charitable estate -- the majority-owning Hershey Trust Co. -- announced it wanted to diversify. However, it's only now, nearly six months later, that food conglomerates are going cuckoo for cocoa's puff.
Last month's $11.5-billion offer by Nestlé was more than fair. With food companies trading for roughly one-and-a-half times trailing sales, the Swiss giant's bid valued Hershey at a little more than two-and-a-half times the company's annualized revenue. Hershey's brand, like the many nuggets in its brand portfolio, is clearly significant.
However, despite Hershey's global prowess, this bidding war won't escalate much higher. While Hershey locals are doing their best to block the bidding process and force a Swiss miss, there's too much money at stake.
No company is an island, even if it's self-billed as the sweetest place on Earth.