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Monday, 2 September, 2002, 06:31 GMT 07:31 UK
Chocolate power struggle intensifies
Hershey's Chocolate World
Nestle and Cadbury, two of the world's biggest confectioners, are reportedly considering a joint bid for the iconic chocolate maker, Hershey.

But the news of potential cooperation between the two rivals comes as fierce opposition to Hershey's sale is growing in the US.

Pennsylvania-based Hershey, whose brands include such American favourites as Reese's Peanut Butter Cups and Hershey's kisses, has been put up for sale by the Milton Hershey School Trust.

But two lawsuits have already been filed against the sale, including one from an association for orphan ex-pupils of a school set up by the firm's founder.

On Tuesday, a court is expected to hear a motion from Pennsylvania's attorney-general attempting to halt the sale.

Local residents are planning to protest outside the courtroom, according to the Financial Times.

Biding their time

The controversy is likely to dampen any enthusiasm for an immediate tie-up between Nestle and Cadbury.

Analysts are already speculating that the firms would split Hershey's key brands between them after a deal is reached.

Nestle's chief executive, Peter Brabeck, has already signalled that the deal could run into regulatory problems if the Swiss giant acquires the whole firm.

It would also weigh heavily on the firm's debt-heavy balance sheet.

Analysts also said that Nestle may agree the deal and then sell the brands onto Cadbury in order to ease negotiations.

See also:

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