The US confectioner was believed to be the only remaining interested firm, and had been set a deadline of Monday (25 January) to offer Cadbury shareholders an alternative offer.
Reports suggest that Hershey’s board met last night and have opted to walk away from launching any bid for Cadbury, leaving the way clear for Kraft to takeover the firm. Hershey have previously declared their interest in a bid, but have never tabled any offers.
Kraft Foods agreed a recommended deal to buy Cadbury for around £11.9bn on Tuesday (19 January), increasing its offer to 840p per Cadbury share, in a move to create a “leader in the global foods and confectionery sector”.
Industry experts have given a cautious welcome to Kraft’s agreed takeover bid and say its pledge to take a “best of both approach” to its marketing must focus on integrating the cultures of both brands if it is to succeed.
Hershey was initially due to bid for Cadbury in a joint effort with Ferrero, before the Italian confectioner walked away from joint-bid talks.
Nestlé also walked away from launching any potential bid for its rival confectioner.
Cadbury shareholders now have until 2 February to agree to Kraft’s final bid.