Hershey Trust Not for Sale, Says Chairman

July 8, 2008
The chairman of the Hershey Trust says the company is not for sale although changes are coming

Between the ongoing acquisition of Wm Wrigley Jr. Co. by Mars Inc. and its own late-2007 management housecleaning, speculation has been rampant that Hershey Co. is ripe for sale. But the chairman of the Hershey Trust, in a personal column in the Harrisburg (Pa.) Patriot-News, said the company is not for sale although changes are coming.

“Rarely a day goes by that I don't read someone, somewhere speculating exactly what the Hershey Trust will or won't do in exercising its controlling interest in The Hershey Co.,” wrote Leroy Zimmerman, chairman of the boards of the Hershey Trust and Milton Hershey School. The Hershey Trust controls 78 percent of the voting stock in the company.

“It is a time of change, and this is not a game. The historic collaboration between the Hershey Trust and The Hershey Co. is one of the great American stories of business and philanthropy. Its future is a matter of seminal importance to so many: the good people who work for the company; the numerous investors who own its shares; the community of Hershey; the entire central Pennsylvania region; and -- most importantly, in my view -- the 1,700 children in need that the Hershey Trust serves today through its sole beneficiary, the Milton Hershey School, and the thousands more children it will serve tomorrow.”

Zimmerman acknowledged the board hired merger-and-acquisition advisers more than a year ago. “Transformational merger-and-acquisition transactions are but one of multiple strategic growth options the trust has been continually assessing, in coordination with the company board, as part of the trust's ongoing process and due diligence.

“The last year has been a transitional one for the trust and The Hershey Co. And I am pleased to report that our partnership is healthier than it has been in some time. Much of that is thanks to the new Hershey Co. board, which assumed authority for the company late last year, and of which I am privileged to be a member.

The trust and the new company board now operate from a shared understanding of the trust's core principles as controlling shareholder. These core principles were articulated in a public statement I made last October. They bear repeating, because they remain just as true today:

  • The trust is committed to retaining its controlling interest in the company. This is first and foremost a principle grounded in Milton Hershey's philanthropic legacy. It also is rooted in constraints of Pennsylvania law and practical business imperatives. Simply put: We will not sell The Hershey Co.
  • But The Hershey Co. must improve its performance and enhance its strategic position for long-term growth -- domestically, where the company always has been a leader, and internationally as well. This will require change, and change is always unsettling.”

For the full statement, see www.FoodProcessing.com/HersheyBoard

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