Hershey boss Michele Buck has indicated that mergers and acquisitions could play a major role in the company’s future growth.
Speaking with Fortune magazine, Buck – who replaced John Bilbrey as CEO of the US chocolate company in March – said: “I’m very open to mergers and acquisitions. I see them playing a key role in our growth agenda going forward.
“We’ve an opportunity with mergers and acquisitions to go into spaces where our brands currently can’t travel. And that will be one way we grow.”
Hershey fended off a $23 billion approach from Mondelēz International in July 2016 in a move that would have created an American confectionery giant. Mondelēz had only completed one other acquisition since it was spun-off from Kraft Foods – its 2014 merger with coffee company Jacobs Douwe Egberts – and Mondelēz CEO Irene Rosenfeld came under increased pressure from investors after news of the bid became public. It was announced in August that she would be replaced by McCain Foods’ Dirk van de Put this month.
Buck’s comments come less than a week after Hershey reported strong third-quarter results, including sales of $2.03 billion – up from $2 billion in the same quarter last year – prompting it to raise its outlook for full-year growth to 1.5%.
Her openness to acquisitive growth seems to add weight to the suggestion that Hershey may bid for Nestlé’s unwanted US confectionery arm – rumours reported by CNBC in October.
Nestlé said it was contemplating putting the business up for sale in June, including brands such as Butterfinger and BabyRuth and sales of $924 million last year.
But Buck reiterated that any M&A target had to represent good value, and reaffirmed Hershey’s commitment to meeting consumer trends through innovation.
Hershey had, earlier in the year, revealed details of a three-year programme to grow its profit margin and streamline its operating model. Following a second quarter in which it also raised its growth outlook – on that occasion to 1% – Buck followed up with a commitment to ‘increase investments’ and expand the company’s CMG and snack businesses.
But any add M&A activity now would still be a notable move, its first since a move for Ripple Brand Collective – the maker of BarkThins snacking chocolate – in April 2016.
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