Hershey had acquired 51 per cent stake in GBFL for $60 million to manufacture and distribute confectionery, snacks and beverages across India.
To increase its stake, the $5 billion Hershey will purchase shares from both the parent company Godrej Industries Ltd (GIL) and A Mahendran, CEO of GBFL. After this acquisition, GIL’s share will decrease to 36.99 per cent, while Mahendran’s stake will reduce to 5.16 per cent.
In an application to the government, Hershey claims that this increase in the equity shareholding will not impact the company’s control vested with GIL and Mahendran, and will enable the company to undertake and develop the business by using its know-how. The investment will further help the company leverage on the expertise of the investor company.
GBFL sells edible oil, health drinks, 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.
For the second quarter ended July 1, 2007, Hershey declared consolidated net sales of $1,051,916,000 – compared with $1,051,912,000 for the second quarter of 2006. Net income for the second quarter of 2007 was $3,554,000, or $0.01 per share-diluted, compared with $97,897,000, or $0.41 per share-diluted, for the comparable period of 2006.