Hershey Buys the Other Half of Hershey India
In addition to unveiling its new flagship plant (see story p.17), Hershey Co. in September also struck a deal to acquire the 49 percent stake in Godrej Hershey Ltd. that it does not own, making India a key market for the American candy company.
Godrej Hershey, formed in 2007, has struggled to increase sales and has created about $47.6 million in debt, which will be assumed by Hershey. But Hershey gets full control of the Maha Lacto and Nutrine confectionery brands, as well as Sofit and Jumpin beverage brands, plus the related manufacturing facilities.
The sellers were Godrej Industries Ltd. and another minority shareholder. The transaction is expected to close by the end of the third quarter and the new entity will transition to use the name Hershey India as it becomes a wholly owned subsidiary of Hershey Co.
“India is a key focus market for The Hershey Company,” said J.P. Bilbrey, presient/CEO. “Our partnership provided us with insights and an understanding of the consumers and customers in India. Confectionery and beverage category growth in India is solid and we’re excited about our opportunities. We’ll make the necessary investments in India to accelerate growth, leveraging our core strengths and business model.”
For the year ended December 31, 2011, the Godrej Hershey joint venture had sales of about $80 million. The portion of the net loss for the full year attributable to Hershey was approximately $7 million. When the Godrej Hershey joint venture was announced in 2007, annual net sales were about $70 million.