News > Deals
Nestle, Cadbury in Hershey talks
European food companies discuss possible joint bid for No. 1 chocolate maker.
September 9, 2002: 6:45 AM EDT

NEW YORK (CNN/Money) - As a Pennsylvania court prepares to hear arguments over the sale of Hershey Foods Corp., Nestle SA and Cadbury Schweppes PLC are in talks to submit a potential joint bid for the company, according to a published report Monday.

Under the current plan, Nestle would buy Hershey and put certain assets it eventually plans to sell to Cadbury in a partnership, which the two companies would run together for about five years, the Wall Street Journal reported.

After five years, control of the partnership would be transferred to Cadbury, according to the paper.

In London, shares of Cadbury fell nearly 3 percent Monday on fears that it could ante up close to $4.7 billion to enter the partnership.

Meanwhile, a Pennsylvania appellate court will hear arguments Wednesday on an injunction blocking the sale. Pennsylvania Attorney General Mike Fisher is among the parties seeking the injunction, and he'll present arguments, as will the Hershey trust that seeks to make the deal.

People close to the sale told the Journal they expect the court to rule in favor of the sale.

"[The board] knows they will get sued either way," the person close to the board told the paper. But "they will continue with this process until they can get concrete offers on the table."

The Journal said several other parties, including Kraft Foods, could make competing bids for Hershey if the court allows the sale to proceed.

Shares of Hershey (HSY: Research, Estimates) fell 45 cents Friday to close at $73.85.  Top of page

--from staff and wire reports

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