Food brand Mondelez International (NASDAQ:MDLZ) is out of gum, as in the gum market. The company plans to sell off its chewing gum business on two continents to a separate conglomerate. The stock is slightly down in today’s trading.
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Mondelez sold off its gum line to Perfetti Van Melle Group, who paid a hefty $1.35 billion to lay hands on it. Mondelez was behind several major gum brands, including Trident, Bubbilicious, Dentyne, and even Chiclets, among others. The move should work well for Perfetti Van Melle, who owns both Mentos and Chupa Chups.
As for why Mondelez sold, it noted that it wanted to circle back and focus on its primary stock in trade: chocolate, biscuits, and baked snacks. Currently, that’s 80% of Mondelez’s business. By 2030, however, it aims to make those items 90% of its business. The company’s chocolate presence alone accounts for 32% of sales, while its biscuit business accounts for 47% of sales.
Despite the slight slip in today’s trading, MDLZ still has a Strong Buy consensus rating, with an average price target of $71.08, which implies 8.4% upside potential.