Swiss chocolatier Lindt to acquire US candy maker Russell Stover
15 Jul 2014
Swiss chocolatier Lindt & Sprungli has agreed to take over Russell Stover Candies, maker of Whitman's and other candy brands.
Lindt said it planned to keep the Russell Stover headquarters in Kansas City, Missouri, and would continue improvements at existing factories as "a clear commitment to continuity and local manufacturing."
It also said it had no plans to shut any of the existing plants or to open new ones.
Lindt expects the deal to close in August or September, pending regulatory approval, and the merged firm would have $1.5 billion in combined sales in 2015.
Russell Stover, founded in Denver in 1923, had bought the 1842-founded Whitman's, in 1993.
It employs 2,700 workers across four factories in the US and has an annual sales turnover $500 million.
Lindt & Sprüngli traces its history to its founding 170 years back in Zurich, Switzerland.
It has a workforce of 9,000 working at eight factories in the US and Europe, which does not include the workforce and factories it was in the process of acquiring under the deal.
Lindt did not disclose the financial details of the deal which would make it the No 3 chocolate producer in the US behind Hershey and Mars and take its diversification further beyond the European market where it gets the bulk of its sales.
"This biggest and most important strategic acquisition to date in Lindt & Spruengli's history is a unique opportunity for us to expand our North American chocolate business," Lindt chairman and chief executive Ernst Tanner said in a statement.
The maker of Lindor chocolate balls in March, said its North American sales would exceed $1 billion this year. According to the company, with the addition of Russell Stover, sales in the region should exceed $1.5 billion in 2015.
According to Vontobel analyst Jean-Philippe Bertschy, the move was surprising as Russell Stover was known for its boxed chocolates sold in drug stores and gift shops, which were expected to grow at a slower rate than chocolate overall, Fox Business reported.
He added, however that the acquisition would strengthen Lindt's presence in the seasonal business, such as chocolates for Valentine's Day and Easter, and give it more sales outlets in central US states.
