The Hershey Company has completed the initial closing and acquired an 80% stake in Shanghai Golden Monkey Food Joint Stock Co., Ltd. (SGM), a privately held confectionery company based in Shanghai, China.
The acquisition costs Hershey RMB2,416.8 million (US$394 million).
The combination of Hershey and SGM will accelerate both companies’ growth strategies.
SGM’s well-established, trusted brand name and diverse product offerings provide Hershey with a meaningful presence in China’s sugar confectionery and snacking markets, and complements Hershey’s existing portfolio in the region.
At the same time, SGM will benefit from Hershey’s global scale and recognizable brands and marketing expertise.
Hershey will continue to invest in SGM brands and go-to-market capabilities enabling the company to deliver its products to more consumers throughout China.
The remaining 20% of the shares of SGM will be acquired by Hershey Netherlands at a second closing, which is scheduled to occur on the one-year anniversary of the initial close, at a price of RMB 604.2 million, subject to the parties obtaining necessary government and regulatory approvals and satisfaction of other closing conditions.
The total purchase price upon completion of the second closing will be equal to an enterprise value of RMB 3,543.2 million, which includes the net debt of RMB 522.2 million limit set for the September 2014 close.
