Hershey To Acquire Majority Share Of Shanghai Golden Monkey

HERSHEY, Pa.The Hershey Company's wholly-owned subsidiary, Hershey Netherlands B.V., has signed an agreement to acquire 80% of Shanghai Golden Monkey Food Joint Stock Co., Ltd., a privately held confectionery company based in Shanghai, China. Completion of the agreement is expected to occur in the second quarter of 2014 and is subject to China regulatory and SGM shareholder approval.

With this transaction, Hershey intends to further develop SGMs iconic brands, product portfolio, in-country manufacturing and growing sales force to accelerate its growth in China, enhance its ability to serve Chinese consumers, and provide increased opportunities for employees in the country.

The SGM portfolio includes Golden Monkey candy, chocolates, protein-based products and snack foods. Approximately 75% of SGM net sales are within the non-chocolate and chocolate candy segments. The remainder of SGM net sales is concentrated in the fast growing protein-based bean products and other snack categories. SGMs net sales have been growing double digits, on a percentage basis, and the company is expected to generate net sales of more than $225 million in 2013.

This agreement reflects Hersheys continuing commitment to the China market. In May, Hershey announced the opening of its new Asia Innovation Center, located at the Jinqiao Research Park in the Pudong District of Shanghai. This is a fundamental step toward accelerating the companys growth and enables its global capabilities to develop and launch new products for consumers in China and across the Asia region.

The agreement between Hershey and Shanghai Golden Monkey is a win for both companies," said John P. Bilbrey, president and CEO, The Hershey Company. The strength of SGMs confectionery portfolio and overall distribution capabilities, especially within the traditional trade, is an opportunity for us to leverage scale to make the iconic brands of Hershey and SGM even more powerful. Additionally, SGMs focus on protein-based products and snacking is on-trend with Hersheys consumer-centric marketplace insights."

Subject to the transactions approval, SGM will operate as a standalone business. Hershey will make a cash payment to the seller at the time of closing. The acquisition is not expected to affect Hersheys previously announced adjusted earnings per share-diluted outlook for 2013 and 2014 provided on October 24, 2013. Excluding integration and transition costs, Hershey expects the acquisition to be slightly accretive on an adjusted basis in 2014.