• The Wall Street Journal, Tuesday, April 29, 2008 9:17 AM

Both Cadbury Schweppes and Hershey would stand to benefit from a marriage after years of failed flirtations -- particularly in the face of intensified competition from a Mars-Wrigley combination. Hershey has little presence overseas, while London-based Cadbury doesn't directly own chocolate brands in the U.S.

Analysts say Mars's bid for Wrigley could spur a round of mergers as companies seek to lower costs by becoming bigger. The global confectionary industry has long lacked a dominant player, and other scenarios are possible. Kraft Foods, which has been trying to expand its international presence could make a play for Cadbury, as could Nestlé. The top 10 manufacturers controlled just 47% of the $141 billion market as of 2006, the most recent available data.

The stakes are high for both Hershey and Cadbury. After Cadbury spins off its big U.S. soda unit into a publicly traded company, Dr Pepper Snapple Group, Friday, Cadbury won't have a large amount of cash with which to defend itself from a takeover. Hershey has suffered in competition with Mars, which has aggressively marketed its brands while Hershey was shrinking its brand investments.

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