Lindt & Spruengli AG, the world’s largest producer of premium chocolate, agreed to acquire Russell Stover Candies Inc. to become the third-biggest chocolate producer in North America.
The purchase is the biggest in the company’s history, Switzerland-based Lindt said in a statement, without disclosing the price. Russell Stover will add annual sales of about $500 million, taking Lindt’s sales in North America beyond $1.5 billion in 2015, it said.
Russell Stover is the biggest US maker of boxed chocolate whose products are a regular feature of candy stores across the US. The acquisition of the closely held company will give Lindt 7.9 per cent of the North American chocolate market, according to Bloomberg Industries data, propelling it past Nestlé SA. The company will be a distant third behind Hershey Co. and Mars Inc., which together control more than half of the market.
The purchase “is a unique opportunity for us to expand our North American chocolate business and will greatly enhance the group’s status in the world’s biggest overall chocolate marketplace”, Lindt chief executive officer Ernst Tanner said in the statement.
The acquisition will be funded through net cash resources and bank loans. The transaction will make a “strong, positive contribution” to earnings per share from 2015, Lindt said.
Whitman’s, Pangburn’s
The Financial Times reported on 12 July that the Swiss company was in talks to buy Russell Stover for about $1.4 billion.
In addition to its eponymous brand, the Kansas City, Missouri-based company makes Whitman’s and Pangburn’s candies. Its products are sold in almost 40 company-owned shops throughout the US and at more than 70,000 drugstores, card and gift shops, grocery outlets and department stores.
Separately, Lindt said that first-half sales rose 6 per cent to 1.2 billion Swiss francs ($1.3 billion), boosted by the addition of new products. The company maintained its forecast for growth of 6-8 per cent for the year on a so-called 'organic' basis.
--Bloomberg News, edited by ESM
