Hershey Co., the maker of chocolate Kisses and Reese’s candies, agreed to buy Shanghai Golden Monkey Food Joint Stock Co. to expand in candymaking in China.
The purchase has an enterprise value of about $584 million, with the U.S. company’s Dutch unit paying $498 million in cash and assuming $86 million in debt, the Hershey, Pennsylvania-based manufacturer said today in a statement.
The U.S. food producer will acquire 80 percent of Shanghai Golden Monkey’s stock in an initial stage to be completed in mid-2014, with the remainder purchased by the Dutch subsidiary a year later, Hershey said.
Shanghai Golden Monkey’s revenue this year will probably total about $225 million, Hershey said. The Chinese company has production sites in five cities and a nationwide presence, with revenue growing in “double digits” on an annual percentage basis, it said.
“The strength of SGM’s confectionery portfolio and overall distribution capabilities, especially within the traditional trade, is an opportunity for us to leverage scale to make the iconic brands of Hershey and SGM even more powerful,” Hershey Chief Executive Officer John Bilbrey said in the statement.