Hershey to hike Indian JV stake to 57.8%
Chocolate and confectionery-maker Hershey is planning to increase its equity stake in Godrej Hershey Beverages and Foods (GBFL) from 51% to 57.84%.
By Pramugdha Mamgain, TNN |
NEW DELHI: Chocolate and confectionery-maker Hershey is planning to increase its equity stake in Godrej Hershey Beverages and Foods (GBFL) from 51% to 57.84%.
As part of it entry strategy, Hershey picked up 51% stake in Godrej Beverages and Foods (GBFL), to manufacture and distribute confectionery, snacks and beverages across the country. Under the deal, Hershey had acquired 51% stake in GBFL for $60 million.
The $5-billion Hershey is now increasing its equity stake in the company by purchasing shares from both the parent company Godrej Industries Ltd (GIL) and CEO of GBFL A Mahendran. Post acquisition of shares, GIL’s stake will come down to 36.99% while Mr Mahendran’s stake will declined to 5.16%. Earlier, Hershey had also acquired IL&FS 40% equity in GBFL.
According to Hershey’s application to the government, the current increase proposed in the equity shareholding would not impact the control vested with GIL and Mr Mahendran over the company. Moreover, the investment made by Hershey would enable the company to undertake and develop the business by using its know-how. The investment would further help the company leverage on the expertise of the investor company.
GBFL is a foods company that sells edible oil, health drinks including soymilk, tomato puree, fruit drinks and bakery fats. Hershey retails brands such as Hershey’s, Reese’s, Hershey’s Kisses and Ice Breakers. Apart from confectionery, it also has baking ingredients, chocolate drink mixes, peanut butter, dessert toppings and beverages.
As part of it entry strategy, Hershey picked up 51% stake in Godrej Beverages and Foods (GBFL), to manufacture and distribute confectionery, snacks and beverages across the country. Under the deal, Hershey had acquired 51% stake in GBFL for $60 million.
The $5-billion Hershey is now increasing its equity stake in the company by purchasing shares from both the parent company Godrej Industries Ltd (GIL) and CEO of GBFL A Mahendran. Post acquisition of shares, GIL’s stake will come down to 36.99% while Mr Mahendran’s stake will declined to 5.16%. Earlier, Hershey had also acquired IL&FS 40% equity in GBFL.
According to Hershey’s application to the government, the current increase proposed in the equity shareholding would not impact the control vested with GIL and Mr Mahendran over the company. Moreover, the investment made by Hershey would enable the company to undertake and develop the business by using its know-how. The investment would further help the company leverage on the expertise of the investor company.
GBFL is a foods company that sells edible oil, health drinks including soymilk, tomato puree, fruit drinks and bakery fats. Hershey retails brands such as Hershey’s, Reese’s, Hershey’s Kisses and Ice Breakers. Apart from confectionery, it also has baking ingredients, chocolate drink mixes, peanut butter, dessert toppings and beverages.
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