Mike Snider, USA Today
Hershey's purchase of Chinese candy maker Shanghai Golden Monkey Food Co., sounds like a match made in confectioner's heaven.
Hershey, Penn.-based maker of chocolate Kisses and Reese's candies has
agreed to pay $498 million for the Chinese company, which makes snacks
including Wedding Day candies and My Love chocolates. Hershey will also
assume $86 million in debit.
subsidiary Hershey Netherlands B.V. will acquire 80% of Shanghai Golden
Monkey's stock by mid-2014 and the remainder in 2015. Shanghai Golden Monkey Food
has five production sites and is expected to its growing revenue is
expected to hit $225 million this year. It makes more than 200 varieties
of candy and snacks marketed throughout China and also sold across
Southeast Asia, as well as the U.S., Australia, New Zealand, Russia,
Mongolia, Kazakhstan and Latin America.
The acquisition is part of
Hershey's move to expand its operations in China. Back in May, Hershey
opened an Asia Innovation Center in Shanghai.
Monkey is the type of business we've been focused on for potential
M&A," said Hershey International president Humberto P. Alfonso in a
statement accompanying the acquisition. "It fits Hershey's acquisition
criteria: it is located in our primary international market, China; it
is a pure play confectionery and snacks company; and it has distribution
into channels where Hershey products have yet to penetrate.
Additionally, the company has a strong history of innovation and product
quality as evidenced by the outstanding reputation of its core brand,
Golden Monkey, which has been nationally recognized as one of China's
most iconic brands."