Watch out Mars, Hershey, and Mondelez: Ferrero International is taking a bigger bite out of the U.S. candy market.
This week, the Italian company behind Ferrero Rocher, Tic Tac mints, and Nutella agreed to buy Ferrara Candy Co., the maker of Lemonheads and RedHots, from private-equity firm L Catterton. According to The Wall Street Journal’s sources, the deal cost about $1.3 billion.
Ferrero plans to continue to operate Ferrara as a separate unit, maintaining its headquarters in Chicago suburb of Oakbrook Terrace, the Journal reports.
Private, family-controlled Ferrero is the world’s fourth-largest confectioner by market share, with revenue of $12 billion in 2016, but it ranks sixth in the U.S.
In addition to its Ferrara purchase, Ferrero is reportedly considering a bid to buy Nestlé’s U.S. candy business. Nestlé, the No. 4 candy maker in the U.S., put the unit that produces the Butterfinger and Baby Ruth brands on the block earlier this year and has reportedly received a number of bids in the range of $2 billion to $2.5 billion. Buying Nestlé’s U.S. assets—along with its Ferrara pick-up—would move Ferrero up to No. 3 in the U.S. behind Mars Inc. and Hershey.