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Snack Maker Mondelez Drops Pursuit of Hershey

Mondelez has ended talks regarding a possible acquisition of Hershey, saying it determined there was “no actionable path forward” following recent shareholder developments at the chocolate maker.

BREAKING:

*Mondelez had Raised Hershey Bid to $115 a Share Last Week Before Abandoning Pursuit Today -- Source

*Hershey Had Said Price Discussions Would Need to Begin at $125 a Share -- Source

*Hershey Said Deal Couldn’t Take Place Before Trust Board is Reconstituted -- Source

*Trust Board Likely Won’t be Reconstituted Until Next Year -- Source

(More to come)

EARLIER:

Mondelez International Inc. MDLZ -0.05 % has ended talks regarding a possible acquisition of Hershey Co. HSY 0.71 % , saying it determined there was “no actionable path forward” amid recent shareholder developments at the chocolate maker.

Hershey shares fell 11% to $98.93 in recent after-hours trading, while Mondelez rose 3.6% to $44.60.

Mondelez made a roughly $23 billion bid for Hershey in June in an effort to create the world’s largest candy maker, an offer Hershey’s board unanimously rejected. The maker of Oreo cookies and Cadbury chocolate bars had proposed a tie-up at $107 a share, half in cash and half in stock.

Deerfield, Ill., based Mondelez’s offer was made as sales at both companies have been under pressure.

Any potential takeover of Hershey, known for its namesake Kisses and chocolate bars, would face obstacles. A deal would require the approval of the Hershey Trust, its largest shareholder, which has opposed a sale in the past.

Mondelez Chairman and Chief Executive Irene Rosenfeld said in prepared remarks Monday that while the company was disappointed, it remains focused on its efforts to deliver sustainable sales growth and stronger margins. Ms. Rosenfeld said Mondelez also remains disciplined in its approach to generating value, including through acquisitions.

The snack maker plans to provide more details at an upcoming industry conference on Sept. 7.

The Wall Street Journal reported last month that the Hershey Trust, which oversees billions of dollars for a local, nonprofit school had agreed to make significant governance changes that could affect the future of the chocolate company, citing people familiar with the matter. The trust agreed on terms of a settlement with Pennsylvania’s top law-enforcement officer, which has been investigating the trust board over allegations of excessive compensation and conflicts of interest.

Earlier in July a board member of the trust controlling Hershey resigned, another sign of uncertainty at the famous chocolate maker.

Through Monday’s close, Hershey shares had retreated 5.2% from an all-time high of $117.79 hit after Mondelez made its offer.

Write to Tess Stynes at tess.stynes@wsj.com

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