Hershey Sale is Sticky Business
Nestlé, Vevey, Switzerland, will have to stop licking its lips, at least for the short term. State Judge Warren Morgan issued a temporary restraining order on Sept. 4 halting the sale of Hershey Foods. At presstime, The Hershey Trust Co. — which owns 77 percent of the confectionery giant — was appealing the decision.
The sale of the Hershey, PA-based candy maker is proving to be sticky business (September PROMO). Since announcing last month that it was placing the company on the auction block, The Hershey Trust Co. has faced a firestorm of resistance from workers and the Hershey community. That prompted Pennsylvania Attorney General Mike Fisher (a candidate for governor) to file a motion to block the sale. The Dauphin County Orphans Court heard the case in Harrisburg, PA. The Hershey Trust oversees a $5.9 billion trust fund for the Milton Hershey School for disadvantaged children, established by company founder Milton Hershey.
Nestlé spokesperson Marcel Rubin told Reuters that regardless of the ruling, the court case “is certainly not the final step.” Still, opposition isn’t coming just from inside Hershey: Analysts have criticized Nestlé’s reported $11.5 billion bid, saying such a price would seriously harm its credit rating. Nestlé shares dropped 10 percent, then bounced back after ceo Peter Brabeck insisted the company wouldn’t spend more than $12 billion on Hershey. Either way, the acquisition would most likely surpass Nestlé’s $10 billion purchase of Ralston Purina last year.
There are likely to be more twists. In addition to the upcoming court battle, reports have circulated that Nestlé and rival Cadbury-Schweppes were in discussions about sharing the brands of Hershey Foods. Kraft Foods, Glenview, IL, was also said to be considering a bid.
General Motors and the Women’s National Basketball Association, New York City, announced plans to extend their five-year-old marketing partnership with a new multi-year agreement. As a part of the deal, Detroit-based General Motors will receive in-game advertising, outside signage, and presence on WNBA.com. GM will also continue to sponsor the Player of the Game segment for each nationally televised WNBA game (which entails a $1,000 donation to the Make-A-Wish Foundation in that player’s name).
American Express, New York City, entered a multi-year agreement to be the official card of San Antonio, TX-based Clear Channel Entertainment’s 34 amphitheaters and 25 musical theaters and clubs. American Express cardholders will be able to redeem Membership Rewards points for ticket purchases at Clear Channel venues.
