Lindt strikes sweet deal to acquire Russell Stover Candies (+video)(Read article summary)
Swiss chocolate maker Lindt & Sprügli says it is acquiring Russell Stover Candies, making the company the third-largest chocolate maker in North America. Details of Lindt & Sprügli's acquisition were not disclosed, but several media outlets report the deal was between $1 billion to $1.4 billion.
Russell Stover Candies is Lindt’s biggest acquisition in the company’s history, CEO Ernst Tanner says in a press release. It is a ‘unique opportunity’ for the Swiss company to expand its North American operations, Mr. Tanner adds.
The details were not released, but Russell Stover was expected to sell for $1 billion, according to the New York Times. Another estimate includes $1.4 billion, an anonymous source familiar with the deal tells the Financial Times.
Even without the financial details disclosed, the deal makes Lindt the third-largest chocolate maker in the North America, behind Hershey and Mars. The company also expects to pass its $1.5 billion sales goal in North America in 2015 with the Russell Stover acquisition.
Russell Stover was founded in 1923 in Denver and became notable for its pralines, which were featured in the film "Forrest Gump." In 1993, Russell Stover acquired Whitman’s, one of the US’s oldest chocolate brands. Russell Stover has annual sales of more than $500 million.
Acquiring Russell Stover means Lindt will have a bigger financial stake in seasonal sales. For Valentine’s Day, Russell Stover sold an estimated 35 million of its heart boxes, according to Business Week. Russell Stover’s lower prices are also expected to help Lindt during seasonal sales such as Easter and Christmas.
Lindt hasn’t acquired many major companies since the 1990s. In 1998, Lindt acquired San Francisco-based Ghiradelli Chocolate Company as a subsidiary of the company. Lindt has also bought other European companies, such as Austrian confectionery company Hofbauer in 1994 and Italian chocolate-manufacturing company Caffarel in 1997.
Lindt also released its semi-annual sales report in a separate statement. The chocolate maker ended the first half of 2014 with sales of 1.2 billion Swiss francs, or $1.35 billion US. That is up 6 percent compared with last year.