Report: Hershey-Cadbury candy combo possible

(NEW YORK) -- A senior Hershey officials said Friday that the chocolate giant is open to the possibility of merging with Cadbury Schweppes' candy business, according to The Wall Street Journal.

LeRoy Zimmerman, who serves as chairman of the board of the trust that holds the majority voting rights for Hershey, told the newspaper Friday that the Hershey Trust has "a responsibility to listen to all potential possibilities that might come forward."

The comments come just days after Cadbury CEO Todd Stitzer cited the two companies' complementary businesses in telling analysts in London that a combination would be logical. Earlier this month Cadbury announced plans to split its candy and drink businesses in half.

Hershey's willingness to discuss a potential merger also comes five years after the Hershey Trust, which holds 78 percent of the company's voting rights, put a stop to the company's imminent sale. Today, however, food makers are under increasing pressure to consolidate in order to boost their negotiating power with retailers, The Journal reported.

Hershey (Charts), whose products include Reese's peanut butter cups, Almond Joy, and Bubble Yum, has a $12.6 billion market capitalization. Cadbury's confectionary unit, according to analyst estimates reported in The Journal, is valued at about $17 billion.

In related news, The Journal reported that Cadbury (Charts) is "increasingly likely" to sell its drinks business, which includes 7-UP and Snapple, to a private-equity firm. It's also possible that the division could be spun-off as its own publicly-traded company.