Image Source: The Hershey Company.

What: Shares of The Hershey Company (NYSE:HSY) sank on Tuesday following news that Mondelez International (NASDAQ:MDLZ) was dropping its bid to acquire the company. At 10:30 a.m. EDT, Hershey stock was down about 11%, while shares of Mondelez were up 4%.

So what: Hershey received a $23 billion takeover bid from Mondelez in late June, a development that sent shares of the iconic chocolate company soaring. Hershey rejected the deal, but investors at the time expected a higher bid or even a bidding war could be coming.

Hershey is controlled by the Hershey Trust, an entity that maintains over 80% of the voting power at Hershey. Any deal would have required the trust's approval, and while Mondelez had reportedly offered to make concessions, including a promise to protect jobs and rename the combined company Hershey, getting the approval of the trust posed a major obstacle.

Two months was enough time for Mondelez to decide that pursuing Hershey wasn't worth it. In a press release on Tuesday, the company stated that it was no longer pursuing a combination with Hershey.

Now what: "Our proposal to acquire Hershey reflected our conviction that combining our two iconic American companies would create an industry leader with global scale in snacking and confectionery and a strong portfolio of complementary brands," said Mondelez CEO Irene Rosenfeld. "Following additional discussions, and taking into account recent shareholder developments at Hershey, we determined that there is no actionable path forward toward an agreement."

While Hershey shares are lower on the news, the stock is still up from just prior to the original acquisition announcement. While a combination with Mondelez would have created a snack and chocolate behemoth, Hershey will continue to go at it alone.

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