18 September 2002
Hershey kisses company sale goodbye
Hershey, Pa. – Bowing to community and state pressure, Hershey Foods Corp.'s controlling trust has ordered the giant chocolate maker to take itself off the auction block.
"Hershey Foods Corp. announced today that it was informed by the Hershey Trust Company, as trustee for the Milton Hershey School, that the trust's board of directors has voted to instruct the company to terminate the sale process that the company initiated at the direction of the trust," the company said in a statement Wednesday.
The trust company, which controls 77% of the voting power of Hershey Foods' stock, touched off a firestorm of opposition when it announced 25 July it decided to diversify its holdings and wanted Hershey Foods to explore a sale of the entire company.
Supported by unions, local politicians and other community leaders, Pennsylvania's attorney general, Mike Fisher, sought an injunction to prevent a loss of jobs and tax base locally, which he believes would result if it were sold to an outside firm.
Companies in the running to bid up to $15 billion for the giant chocolate maker included Nestle and Cadbury Schweppes, which planned a joint proposal. InTech sources said Kraft Foods' confectionery unit also was investigating a possible purchase.
Fisher argued that Hershey is more than a business – it's a community. Hershey Foods, which has the largest share of the U.S. chocolate and confectionery sectors with $4.6 billion in sales last year, employs about 6,200 workers. Most of them work and live in Hershey, Pa., a town the candy maker founded and once totally owned.
The Hershey Trust Co. essentially is managing the accumulated wealth of Milton Hershey, who died childless in 1945. It oversees a $5.9 billion fund on behalf of the Milton Hershey School, which serves financially needy children. In 1918, Milton Hershey entrusted all of his chocolate company stock to the school, an imposing building complex located on a hillside overlooking the Hershey, Pa.-based chocolate plant.
Some of Hershey's most popular products include Reese's peanut butter cups; Hershey's chocolate bars, cocoa and syrup; Kisses; Kit Kat wafer bars; Twizzlers; and gums and mints.
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