HERSHEY, Pennsylvania--The town of Hershey, calls itself the "sweetest place on earth."
But if chocolate giant Hershey Co. considers any new acquisition offer in the coming weeks, it could face bitter opposition from some in its namesake town, where residents have prospered from its presence and tend to be fierce defenders of its independence.
The impact of such views goes beyond sentimental in the wake of Mondelez International Inc's $23 billion bid to buy the company, which Hershey said on June 30 it had rejected. The town of Hershey, where the company's staunchest loyalists are referred to as "Hershey-ites", has real influence over corporate decisions.
The Hershey Trust, a $12 billion school charity and the company's controlling shareholder, has become increasingly involved in the local community over the decades, and has appeared to listen to its concerns in the past. Pennsylvania's attorney general, who supervises the trust and can ask a court to block any deal, holds an elected office and is sensitive to local concerns, though the current office holder is not planning to seek reelection.
Pennsylvania law requires any charitable trust to consider, when selling an asset, the “special relationship of the asset and its economic impact as a principal business enterprise on the community” and the “special value” of its ties to the community.
Since the company was founded by Milton Hershey 122 years ago, residents here have fought many plans that would have changed Hershey Co. and, in turn, a community built around one of the world's most famous confectioners. Although the Hershey Trust rejected the bid by the maker of Oreos cookies, a spike in Hershey's share price above the bid of $107 per share has indicated investors expect a new offer.
Many in the rural town of around 14,000 people voiced apprehension to Reuters about a sale, despite apparent reassurances from Mondelez. The food and beverage multinational has offered to keep Hershey's name, move its headquarters to Hershey, and preserve jobs, according to people familiar with the matter who declined to be identified because Mondelez has not disclosed details of the bid. Most residents declined to give their full names, citing local sensitivities around discussing the firm, which employs 4,800 people here.
"I don't think they should sell the company," said a 76-year-old woman who gave her name as G.C., as she guided visitors through Hershey's Chocolate World, a sprawling candy store stocked with giant chocolate bars.
"Hershey is Hershey. It should always be Milton Hershey. He did good for the community," said the woman, who has worked at Chocolate World for eight years.
A 3.5-hour train ride from New York, Hershey stretches out across verdant fields between delectably named streets such as Chocolate Avenue and Cocoa Avenue. Between well tended lawns and street lamps shaped like the popular Hershey's Kisses Chocolate, Hershey is dotted with landmarks from a theater to a cemetery that are tied to the confectioner.
Residents point to houses built by Milton Hershey for his factory workers and extol the "Hershey legacy", where a successful business looks after the people, the way Hershey did at the height of the Great Depression in the 1930s by embarking on a construction spree in town to create jobs. House prices and income levels in Hershey are substantially higher compared to neighboring towns in Pennsylvania, according to government data.
Today, the heart of the "Hershey legacy" is arguably found in the Milton Hershey School, a private boarding school for around 2,000 students from low-income families. Their education and living expenses are paid for by the Hershey Trust, which is funded by the Trust's stake in the chocolate maker.
"Everyone who worked for Mr Hershey always had a job," said Ernie, a 69-year-old Hershey worker who declined to give his last name. "It's always been Hershey."
