Hershey today (7 September) announced a deal to take full control of its Indian venture, which has been the subject of speculation for months.
The US confectioner will buy a 49% stake in the loss-making venture held by Indian conglomerate Godrej Industries and other smaller shareholders.
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The venture, which will be renamed Hershey India, owns the Maha Lacto and Nutrine confectionery brands. Its sales in 2011 were US$80m. Hershey said its portion of the venture’s loss last year was $7m.
The Godrej Hershey venture, formed in 2007, had been the subject of speculation in India in recent months. Reports in India had claimed Hershey is looking to sell its 51% stake in the business. However, a report in June said Hershey wanted to operate independently in India.
Last month, Godrej Industries admitted it could sell its stake in Godrej Hershey, a business it described as “potentially sick”.
“India is a key focus market for The Hershey Company,” president and CEO J.P. Bilbrey said. “We have a great deal of respect for Godrej. Our partnership provided us with insights and an understanding of the consumers and customers in India. confectionery and beverage category growth in India is solid and we’re excited about our opportunities. We’ll make the necessary investments in India to accelerate growth, leveraging our core strengths and business model.”
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