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Nestlé quiet on Hershey sale

05-Aug-2002

Swiss food group Nestle on Friday declined to comment on market talk it might want to buy US confectionery maker Hershey, but said it would be keen on regaining its top-selling Kit Kat brand in the United States.

Kit Kat chocolate bars are manufactured by Hershey Foods under licence in North America.

The proposed sale of the 108-year-old confectionery company in Hershey, Pennsylvania, was announced last week by the Hershey Trust, a powerful for-profit corporation with trust duties. Tempers are high in the small confectionery town with workers, politicians and town citizens taking to the streets at the weekend in protest against the sale.

With $5.4 billion (€5.5bn) in assets, the Hershey Trust controls 77 per cent of Hershey Foods' voting power and could strike a deal worth up to $12 billion (€12.2bn) with a buyer.

The Financial Times newspaper reported on Friday that Nestle was a front-runner in the race for Hershey, along with Kraft and Cadbury Schweppes.

"We have said that we would not comment on whether we are bidders or not," Nestle spokesman Francois Perroud told Reuters. "We have also said that we are going to act vigorously to regain the Kit Kat brand (in North America) and, quite evidently, we are following with interest what is happening in our sector."

Kit Kat is Nestle's best-selling individual confectionery product globally. The North American rights to the brand would revert to Nestle should Hershey be sold to another company, therefore making the US group worth less to other potential bidders.

"We're clearly going to make sure that license gets back to us in case there is a change of control (at Hershey)," Perroud said.

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