The proposed merger between Hershey and Mondelez at the end of last week was quickly rebuffed by The Hershey Trust which represents 81% of the voting power in the company. The trading of Hershey stock continued to climb due to an increased perception that, although the Mondelez deal was rejected, the chocolate giant would be acquired by another entity.

In my initial piece on this proposed deal last week, I was skeptical of the Mondelez offer for Hershey because it was being initiated because Mondelez had no room to grow, needed a branding makeover, and needed to grow market share in North America in their confectionary division. These three rationales are usually indicators which portend a poorly conceived merger of two organizations which generally ends badly.

Mondelez is now left to search for another potential partner so that they can attempt to gain a more stable foothold into the North American confection and snack marketplace. The former division of Kraft Foods has the cash to spend to make this acquisition eventually take place with the right suitor.

The merger proposal rebuffed by Hershey had some definite hurdles via the Pennsylvania state level regulatory bodies and through federal anti-trust regulations. Hershey remains an attractive target for another food company to pursue, and those suitors could line up in the weeks and months to come before the close of the calendar year.

However, that being stated, The Hershey Trust and the Pennsylvania Attorney General’s Office both have the ability to block the potential sale of Hershey and have done so in the past. The successful acquisition of Hershey would have to be a well-structured deal that accounts for all of the political and business implications involved; therefore that type of bid would have to be navigated by investment banks and M&A executives who have been involved in similar scenarios.

The way forward for Mondelez at this point is unclear, the executives and others there most probably felt that they put together an impressive offer to obtain Hershey. It now appears that the deal will never materialize.

In my view, the potential for a Mondelez bid for a company such as Mars Candy is not too far a stretch. That potential acquisition would provide the expanded market share in North America in strategic markets, it would provide a branding image makeover for Mondelez, and it would allow for the consolidation of resources to aggressively deal with rising commodity prices for cocoa as well as other staple ingredients in the confectionary industry.

In the case of Hershey, my opinion is that they could be merged with a larger food conglomerate such as ConAgra, which made news earlier this year with the announcement that they were moving their corporate headquarters from Omaha to downtown Chicago in order to be a more desirable employment destination for younger generations who desire to live and work in cities. They have an eye towards growth and Hershey could be a bold move into new territory for them.

In the end, the Mondelez – Hershey deal was a non-starter because Hershey did not want to sell to them and be merged with a company that has some other rather daunting issues. The right deal will come along for both companies to chart their respective future strategic growth and that is going to be interesting to see unfold in the months ahead.