Hershey's: Bitter Times in a Sweet Place
HERSHEY FOODS CORPORATION: BITTER TIMES IN A SWEET PLACE
INTRODUCTION
Born into a poor, lower-class family, Milton S. Hershey dropped out of school before reaching the fourth grade. He developed an interest in becoming a confectioner. He believed there would be great demand for affordable, mass-produced chocolate, and thus he built the Hershey Chocolate Company. Hershey’s is now the largest producer of quality chocolates in North America and a global leader in chocolate and sugar confectionery. Although he enjoyed making money, Milton S. Hershey was intent on using his vast fortune for philanthropic purposes. He decided to surround his enterprise with a model town and personally financed the building of roads, utilities, houses, and public buildings. In addition, he and his wife donated their whole fortune to create the Milton Hershey School. The Hershey Trust Company was created to manage the founder’s large endowment. Additionally, the Hershey Trust Company’s board of trustees was given the principal objective to financially support the mission of the Milton Hershey School. By 2002, the Hershey Trust Company became Hershey Foods Corporation’s largest shareholder, owning 77% of the stockholders’ votes. In March of 2002, the Hershey Trust Company’s board of trustees decided to sell the shares it held in the Hershey Foods Corporation with the belief that it would be better to diversify its holdings and not concentrate the bulk of its investments in Hershey stock. The Hershey Trust Company board of trustees considered two offers: a $12.5 billion dollar bid from the Wm. Wrigley Jr. Company; and a $10.5 billion dollar joint bid from Nestlé S.A. and Cadbury Schweppes PLC. Hershey Foods Corporation, its employees, the community of Hershey, Pennsylvania, and the Attorney General of the state of Pennsylvania were adamantly opposed to this sale.
CONCLUSIONS
We favor the rejection of Wrigley's offer as well as that of Nestlé S.A./Cadbury
INTRODUCTION
Born into a poor, lower-class family, Milton S. Hershey dropped out of school before reaching the fourth grade. He developed an interest in becoming a confectioner. He believed there would be great demand for affordable, mass-produced chocolate, and thus he built the Hershey Chocolate Company. Hershey’s is now the largest producer of quality chocolates in North America and a global leader in chocolate and sugar confectionery. Although he enjoyed making money, Milton S. Hershey was intent on using his vast fortune for philanthropic purposes. He decided to surround his enterprise with a model town and personally financed the building of roads, utilities, houses, and public buildings. In addition, he and his wife donated their whole fortune to create the Milton Hershey School. The Hershey Trust Company was created to manage the founder’s large endowment. Additionally, the Hershey Trust Company’s board of trustees was given the principal objective to financially support the mission of the Milton Hershey School. By 2002, the Hershey Trust Company became Hershey Foods Corporation’s largest shareholder, owning 77% of the stockholders’ votes. In March of 2002, the Hershey Trust Company’s board of trustees decided to sell the shares it held in the Hershey Foods Corporation with the belief that it would be better to diversify its holdings and not concentrate the bulk of its investments in Hershey stock. The Hershey Trust Company board of trustees considered two offers: a $12.5 billion dollar bid from the Wm. Wrigley Jr. Company; and a $10.5 billion dollar joint bid from Nestlé S.A. and Cadbury Schweppes PLC. Hershey Foods Corporation, its employees, the community of Hershey, Pennsylvania, and the Attorney General of the state of Pennsylvania were adamantly opposed to this sale.
CONCLUSIONS
We favor the rejection of Wrigley's offer as well as that of Nestlé S.A./Cadbury