Hershey Agrees To Buy 80% Of Shanghai Golden Monkey Food Joint Stock

(RTTNews) - Chocolate maker Hershey Co. (HSY) Thursday said its wholly-owned subsidiary Hershey Netherlands B.V. has signed an agreement to acquire 80 percent of Shanghai Golden Monkey Food Joint Stock Co., Ltd. or SGM, a privately-held confectionery company based in Shanghai, China.

With this deal, Hershey plans 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. SGM will benefit from the scale and scope of Hershey to enable the sustainable, long-term development of its trusted brands.

Completion of the agreement is expected to occur in the second quarter of 2014. Hershey will make a cash payment to the seller at the time of closing.

SGM will operate as a standalone business reporting to Humberto Alfonso, President, Hershey International. Many of SGM's senior management team, including Founder, Chairman and General Manager Zhao Qisan, have agreed to continue in their current roles.

The acquisition is not expected to affect Hershey's previously announced adjusted earnings per share outlook for 2013 and 2014 provided on October 24. Excluding integration and transition costs, Hershey expects the acquisition to be slightly accretive on an adjusted basis in 2014.