Thursday, April 5, 2007

Hershey forms JV with Godrej Foods; acquires 51% stake in latter

Renowned US-based chocolate maker Hershey has announced a joint venture with Godrej Beverages and Foods Limited, a subsidiary of diversified conglomerate Godrej Industries. The JV, named Godrej Hershey’s Foods and Beverages Limited, would manufacture and distribute confectionery, snacks and beverages across the country.

Under the deal, Hershey will acquire 51% stake in Godrej Beverages and Foods for $60 mn. The parent company Godrej Industries and Hershey will hold 43% in the new venture, and the remaining 6% will be held by JV CEO A Mahendran. Hershey is acquiring 40% from IL&FS which is exiting the venture. Hershey would license to Godrej Foods some of its trademark rights for $2 mn, in addition to royalty payments of less than 5% for domestic sales and 8% for exports. Hershey may also use the facilities of GBFL as a manufacturing base for the company in India. The new entity would get two of Godrej Foods’ existing manufacturing facilities at Mandideep and Chittur.

Read more in The Economic Times article.
Related Post:
Hershey to buy 51% stake in Godrej Beverages & Foods

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