MUMBAI (AFP) – US chocolate maker Hershey will pay 60 million dollars for a 51 percent of India’s Godrej Beverages and Foods to gain entry into the country’s snacks market, the company’s chief executive said Tuesday.
The Indian company will be renamed Godrej Hershey Foods and Beverages and manufacture confectionery, snacks and drinks in India aimed at its fast-growing middle class, said Richard H. Lenny, chairman and chief executive officer of Hershey.
“The steps taken today are part of our global expansion strategy. We see Asia and India as major drivers for future growth,” Lenny told reporters in India’s financial hub of Mumbai.
Parent company Godrej Industries will hold 43 percent and a director of the newly named firm, A. Mahendran, will hold the remaining six percent.
“The joint venture is a strategic fit and gives us access to a strong portfolio of confectionery brands,” Adi Godrej, chairman of the 1.65 billion dollar Godrej group told reporters.
To complete the deal, the maker of Hershey’s Kisses and Reese’s peanut butter cups will first buy a 40 percent stake held by infrastructure finance company ILFS in Godrej Beverages.
Godrej Beverages, a subsidiary of Godrej Industries, sells tea, edible oils, beverages, packaged foods, cooking pastes and sweets.
Hershey’s brands are set to be launched in India by March 2008, Bobby Agarwal, commercial director of Godrej Hershey Foods said.
India, a nation of 1.1 billion, has a chocolate market estimated at 300 million dollars, a fraction of the global sales of 57 billion dollars, according to industry figures.