The Hershey Co. announced today that it plans to buy out the 49 percent stake of Godrej Industries in their Indian joint venture, Godrej Hershey Ltd.
Rumors had been swirling for more than a year that the relationship between the two companies could be on the rocks and this year Indian media repeatedly said Dauphin County chocolate giant Hershey was planning a buyout of the joint venture.
Derry Township-based Hershey today confirmed that and said the deal could be finalized by the end of the third quarter. Total value of the acquisition is not being released, said Leigh Horner, a Hershey spokeswoman. The deal includes Hershey assuming $47.6 million in debt related to the joint venture.
"India has and will continue to be an important market. … This really underscores (our) commitment to that market," she said.
With India and China set to account for about 50 percent of the world's growing middle class, this deal will drive Hershey's strategy to expand its global presence, particularly in the developing world, Horner said.
"It really reinforces the strategy we released earlier this year," she said.
Through the years, Hershey has learned a lot about Indian markets, consumers and products through its relationship with Godrej, she said. This deal just gives the company more leverage for the future in the market.
"It's one now that we're really in the driver's seat in terms of growth there," Horner said.