The Hershey Co. announced that it has signed an agreement to acquire 80% of the iconic Shanghai Golden Monkey Food Joint Stock Co. Ltd. (SGM), a privately held confectionery company based in Shanghai, China. Completion of the agreement is subject to China regulatory and SGM shareholder approval and is expected to close in mid 2014.
Hershey is one of the fastest growing confection companies in China. With this transaction, Hershey intends to build on the success of SGM’s iconic brands, diverse 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. At the same time, SGM will benefit from the scale and scope of Hershey to enable the sustainable, long-term development of SGM’s trusted brands.
Today’s announcement builds on Hershey’s continuing commitment to the China market by providing world-class quality products to Chinese consumers. 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 company’s growth and enables its global capabilities to quickly develop and launch new products customized to the tastes of consumers in China and across the Asia region.
SGM manufactures, markets and distributes the well-known and award winning Golden Monkey branded products. The SGM portfolio, which also includes Golden Monkey candy, chocolates, protein-based products and snack foods, is widely marketed across China in many cities and rural areas. 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.
“The agreement between Hershey and Shanghai Golden Monkey is a win for both companies,” said John Bilbrey, president and CEO of The Hershey Co. “The strength of SGM’s 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.