Mondelez International has unveiled new plans to help regain lost ground, after reporting weak results for its fiscal second quarter.
The group confirmed that it had made an unsolicited $23bn offer to purchase rival Hershey Co, although it did not offer any reason for the unexpected move. CEO Irene Rosenfeld noted: “While I can confirm that we did make an offer to Hershey, as you would expect regarding any potential M&A activity, we have no additional comments to make”.
Separately, Mondelez said it will launch its Milka chocolate brand – as well as more than a dozen other products – in China’s $2.8bn market. The products will be available in the country from September. The move has prompted questions about the timing, given the 3% drop in chocolate confectionary sales across China in 2015.
Both announcements came even as Mondelez said its second-quarter revenues fell by 17.7% to $6.3bn, the 11th straight quarter they have fallen. The group was hurt by weakness outside North America, as well as weak biscuit demand in North America. Net profit, however, grew by 14.3% to $464m.
Rosenfeld said business had weakened as some of its biggest customers were changing their buying policies towards healthier-for-you items, adding: “Some very aggressive trade spending from some of our competition is not helping to grow the category, but we certainly are responding”.