Hershey plans to buy out Indian partner
New York, September 8, 2012
Hershey plans to buy the remaining 49 per cent in its Indian joint venture that it does not own, giving it full control of a chocolate business in one of the world's biggest markets.
Financial terms of the deal were not disclosed. But it ends months of Press speculation that Godrej Industries, Hershey's partner since 2007, wanted out of the Godrej Hershey venture, which lost money in 2011 with sales of $80 million.
Hershey said it will assume about $47.6 million in debt, and will own the Maha Lacto and Nutrine candy brands and the Jumpin and Sofit beverage brands, as well as related factories.
Last month, the board of directors of Godrej - a diversified company with interests in chemicals, animal feed and processed food and beverages - approved a proposal to explore possibilities for its stake in the joint venture, including its sale.
'Godrej Hershey Limited is potentially sick and the shareholders of GHL may look at redressing the issue,' the board said in August.
The transaction may close by the end of the third quarter, after which the wholly-owned subsidiary will be called Hershey India.-Reuters