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Hershey completes acquisition of Shanghai Golden Monkey

By Ding Yining | September 26, 2014, Friday | Online Edition

US chocolate and confectionary maker Hershey Company said today it has completed the acquisition of an 80 percent stake in food company Shanghai Golden Monkey Food Join Stock Co.

The US$394 million takeover is expected to boost Hershey's market position and lift sales in the non-chocolate sector in China, as the US company hopes to deepen penetration in lower tier cities.

Hershey will acquire the remaining 20 percent stake if Shanghai Golden Monkey within a year after the initial deal closes, which is subject to regulatory approval.

Hershey expects its China sales to rise 40 percent from a year ago to US$200 million this year, and to further climb to US$500 million by the end of 2015 after consolidating sales figures with Shanghai Golden Monkey.

"Our primary focus currently is on the China market and we'll consider the opportunity to introduce Shanghai Golden Monkey's products to overseas markets," Humberto Alfonso, president of Hershey International, said at a media briefing in Shanghai.

In 2015, half of Hershey's sales will come from non-chocolate products, including candies and snacks, as it intends to broaden its product portfolio in its fastest growing market.

Last year, Shanghai Golden Monkey's sales were US$200 million, and it has manufacturing bases in five domestic cities.

Zhao Qisan, chairman of Shanghai Golden Monkey, will remain the a minority shareholder in the company, and both parties will appoint members to the executive committee to run the local food manufacturer, as it will remain an independent business unit under Hershey International.

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