Can Hershey step up to buy Mondelez?

Hershey and Mondelez are more likely to bolster collaborations in overseas markets rather than engage in a full-scale merger in the near future, according to Bernstein. The firms have already achieved notable success with joint Reese's and Oreo product launches in 2025. Mondelez holds a substantial China market presence, whereas Hershey has faced challenges establishing a foothold there.

A partnership could enable Hershey to leverage Mondelez's established distribution and market knowledge to broaden its brand reach. Europe presents a comparable opportunity for growth. While Hershey has made headway with Reese's peanut butter cups in Britain and other European nations, its overall European presence remains modest.

A potential acquisition by Hershey has not been ruled out, but the current control structure of the Hershey Trust, which owns roughly 79% of voting shares through Class B stocks, presents substantial obstacles. Even under optimistic scenarios, where Hershey's share price is 15% higher than Mondelez's and Hershey achieves cost savings equivalent to 8.5% of sales, earnings per share would only be diluted initially by 5% and become accretive by nearly 11% in two to three years.

However, a more aggressive leverage ratio of four times could result in less than 2% dilution and 16% accretion. Given the significant structural barriers and lack of public statements from either company, Bernstein does not foresee a Hershey acquisition of Mondelez in the near term. Instead, they anticipate continued cooperation between the U.S. and international markets, with a merger becoming more plausible if market conditions and governance evolve favorably.