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Hershey inks sweet US$584m deal
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Hershey will pay US$584 million to acquire 80 percent of confectionery maker Shanghai Golden Monkey Food Co to boost its presence and drive sales, the US chocolate and candy maker said yesterday.
Hershey will fund the acquisition with US$498 million cash and a debt of US$86 million.
The deal is expected to be completed in the second quarter of next year and is subject to regulatory approval. Hershey will also purchase the rest of the local company within a year after the completion.
Hershey intends to build on the success of Shanghai Golden Monkey’s brand and diverse product portfolio to boost sales in the country and enhance its market position as well as provide a wider distribution channel, the company said.
“It fits Hershey’s acquisition criteria: it is located in China which is our primary international market and it has distribution into channels where Hershey products have yet to penetrate,” Humberto Alfonso, president of Hershey International, said in a statement.
Its acquisition came after the company set up the Hershey’s Asia Innovation Center in Shanghai earlier this year as it sought to better cater to local tastes.
“Shanghai Golden Monkey’s strong confectionery portfolio and distribution capabilities provide an opportunity for us to leverage scale to make both companies’ brands more powerful,” John Bilbrey, president and chief executive of Hershey, said.
The Shanghai firm has manufacturing plants in five domestic cities. This year sales are projected at US$225 million.
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