Case 44

1713 Words7 Pages
Case #44

Synopsis and Objectives

The proposed sale of Hershey Foods Corporation (HFC) during the summer of 2002 captured headlines and imaginations. After all, Hershey was an American icon, and when the company’s largest shareholder, the Hershey Trust Company (HSY), asked HFC management to explore a sale, the story drew national and international attention. The company’s unusual governance structure put the Hershey Trust’s board in the difficult position of making both an economic and a governance decision. On the one hand, the board faced a challenging economic decision that centered on determining whether the solicited bids provided a fair premium for HFC shareholders. On the other hand, the governance decision required the
…show more content…
* In 2002, Nestlé acquired German ice-cream maker Schoeller Holding Group as well as U.S. food company Chef America, maker of Hot Pockets and Lean Pockets. * Nestlé also spun off eye-care subsidiary Alcon Laboratories but retained about 75% ownership of it. * The company renamed its water unit from Perrier Vittel S.A. to Nestlé Waters, and bought Russian bottled-water company Saint Springs. * The company sold its savory-flavors business, Food Ingredients Specialities (FIS), to Swiss flavoring-company Givaudan, and its United Kingdom and Ireland ambient-foods business to Hicks, Muse, Tate & Furst. * Nestlé formed a joint venture with New Zealand dairy co-op Fonterra to produce and distribute dairy products in the Americas.

Cadbury Schweppes PLC

* Cadbury Schweppes bought the U.S.-based Adams chewing gum and mint business from Pfizer, Inc., for $4.2 billion in December 2002. The Adams brands include Dentyne, Bubbaloo, and Halls throat lozenges. Wrigley had also been a bidder in this deal.

The Wm. Wrigley Jr. Company

* Given its strong balance sheet, Wrigley remained interested in making an acquisition, particularly in the mint business. * With increased sales of its products in Russia and China, Wrigley planned to double its revenues to $5 billion by 2006. * The firm began looking into health-oriented products.

Epilogue Update: July 2008

In October 2007, CEO Richard Lenny announced that he would resign from HFC. The

More about Case 44

Get Access