Swiss chocolate purveyor Lindt & Sprüngli has agreed to buy U.S.-based Russell Stover Candies, a deal that will create the third largest chocolate manufacturer in North America at a time when global demand is booming for the sweet treat.
Terms of the deal weren’t disclosed, though Zurich-based Lindt called the transaction the “biggest and most important strategic acquisition” in the company’s history.
With the deal, Lindt is acquiring two key brands: Russell Stover and Whitman’s. Russell Stover, which was founded in 1923, manufacturers gift pralines while Whitman’s is a manufacturer of both pralines and seasonal candies. Russell Stover has owned Whitman’s, one of America’s oldest chocolate brands, since 1993.
Lindt’s acquisition of Russell Stover includes four production sites. Russell also runs a chain of about 35 retail outlets, mostly in the central U.S. Russell Stover generates about $500 million in annual sales and employs roughly 2,700 workers.
The deal will be funded through net cash resources and bank loans, and Lindt expects the deal will add to earnings from 2015 onward. The companies said they agreed not to disclose the purchase price or other contractual details.
The merger comes as global sales of chocolate confectionery are expected to reach record levels this year. Meanwhile, cocoa futures have soared recently as a result of concerns over supplies not catching up with demand.