CHICAGO — Mondelez International appears to have thrown cold water on investment market and industry chatter that it’s pursuing an acquisition of The Hershey Co.

The buzz began with a Dec. 9 Bloomberg report that, according to anonymous sources, Chicago-based Mondelez has “made a preliminary approach about a possible combination.” Bloomberg said talks were only in the early phases and noted that “there’s no certainty that discussions will lead to a deal” between the two snack, chocolate and confection giants.

Mondelez declined to comment on what it called “market rumors and speculation,” while Hershey didn’t respond to a request for comment. Then on Dec. 11, Bloomberg reported that The Hershey Trust, which has about 80% of Hershey’s voting power, rejected an acquisition proposal from Mondelez as too low.

However, also on Dec. 11, Mondelez unveiled a $9 billion share repurchase plan and, in announcing the program, reaffirmed its focus on “brand and capability reinvestment, bolt-on acquisitions,” mentioning nothing about potential transformational opportunities such as a bid for Hershey.

“Given current market conditions, share repurchase remains an opportunity and key priority,” Mondelez said. “The company remains committed to an acquisition strategy that is focused on bolt-on assets similar to recent acquisitions of Chipita, Clif and Ricolino.”

Mondelez said its board of directors authorized a new share repurchase authorization of up to $9 billion of Class A common stock, starting Jan. 1, 2025, and effective until Dec. 31, 2027. The latest buyback program replaces the current $6 billion authorization, of which about $2.8 billion is remaining and was set to expire on Dec. 31, 2025. The board also declared a regular quarterly dividend of 47¢ per share of Class A common stock, payable on Jan. 14, 2025, to shareholders of record as of the close of business on Dec. 31, 2024.

“Our new $9 billion share repurchase authorization reflects the strength of our business, with robust profit dollar and cash flow growth to reinvest in brands and capabilities while also returning significant capital to our shareholders,” said Dirk Van de Put, chairman and chief executive officer. “We continue to make significant progress against our strategy of accelerating growth and focusing our portfolio in the attractive, resilient categories of chocolate, biscuits and baked snacks. Our teams remain focused on executing against our growth agenda in a challenging and dynamic operating environment.”

Is Mondelez in or out on Hershey?

TD Cowen analyst Robert Moskow said Mondelez’s announcement isn’t necessarily a sign that it has waived off the possibility of a deal with Hershey.

“In an unconfirmed article, Bloomberg reports that The Hershey Trust rejected a bid from Mondelez because it was too low,” Moskow said in a Dec. 11 research note. “The Mondelez board ‘responded’ by announcing a $9 billion stock buyback program and saying they remain committed to a tack-on acquisition strategy. At face value, it looks like Mondelez has moved on, but it could be a negotiating tactic to keep the asking price from going too high.”

Back in early September, at the Barclays Global Consumer Staples Conference in Boston, Van de Put and chief financial officer Luca Zaramella had said Mondelez favored a bolt-on acquisition strategy. They cited Mondelez’s January 2022 acquisition of Chipita Global SA, April 2020 acquisition of Give & Go, April 2022 purchase of the Ricolino candy and confections business and August 2022 acquisition of energy and snack bar maker Clif & Co.

“We like mostly bolt-on acquisitions of the likes we have done in the last few years, if you think about Clif, Ricolino, Give & Go,” Zaramella said at the conference. “The way we look at this is, in markets where we don’t have enough scale, we are not necessarily obsessed with acquiring biscuits, chocolate or baked snacks. … We are looking at adding scale and making sure that we can get revenue synergies to our core categories.”

Reflecting that M&A approach, Mondelez in late September announced the purchase of a majority stake in Chinese baking manufacturer Evirth, which specializes in the production of frozen-to-chilled cakes and pastries.

In his report, Moskow said TD Cowen didn’t believe that Mondelez’s reiteration of a bolt-on acquisition approach amounted to a “head fake” by the company.

“We don’t think that Mondelez’s stated commitment to a tack-on acquisition strategy completely rules out bidding for an asset that is ‘too good to pass up’ opportunistically,” he said. “Theoretically, it would be wrong for a company to completely ignore a transformative deal that they and their investors characterize as highly positive.

“Also, we believe that Mondelez expressed at least a passing interest in mega-snack businesses Kellanova and Hostess when they were put in play over the past two years.”

There’s also a “distinct possibility” that The Hershey Trust has in mind “a price at which they would be willing to cede control,” Moskow said.

“This is a material change from prior leadership, which vowed to keep the company independent,” he said. “We continue to view the Trust’s position as vulnerable, given the high concentration of its assets in Hershey stock and rising external threats to long-term demand for indulgent snacks.”

TD Cowen raised its estimated “takeout price” of a potential Mondelez acquisition of Hershey to $255 per share, a 46% premium, from $242 per share, a 38% premium, in its previous projection. Moskow also said in his note that the risks of a Hershey purchase by Mondelez include rising cocoa costs, the impact of GLP-1 weight-loss drugs and the incoming Trump administration’s Make America Healthy Again effort, a lower sales growth algorithm, likely opposition by the Pennsylvania attorney general and a long return-on-investment period.