Yahoo Finance Mars owner buys Hotel Chocolat for £534m in confectionery tie-up
The owner of confectionery brand Mars is buying retailer Hotel Chocolat in a deal worth £534 million, as it plans to help grow the luxury chocolatier overseas.
Hotel Chocolat said it has reached an agreement with food giant Mars Incorporated, which also owns the Celebrations, Dove, M&Ms and Snickers food brands.
The takeover will see Mars help Hotel Chocolat expand in the UK, where it currently has more than 130 shops, and potentially open in new countries.
Angus Thirlwell, co-founder and chief executive of Hotel Chocolat, said: “We know our brand resonates with consumers overseas, but operational supply chain challenges have held us back.
“By partnering with Mars, we can grow our international presence much more quickly using their skills, expertise and capabilities.”
The chain has been operating at a loss after major restructuring efforts last year which helped to bring down costs.
It agreed to a new tie-up in Japan in January after the costly collapse of a previous joint venture in the country.
The previous partnership led the group to write off around £22 million and it was forced to restructure the deal.
The group’s share price has also suffered, trading almost a quarter lower for the past six months after two profit warnings earlier this year.
However, last month it said sales grew by more than a 10th in the three months to October and stores opened this year have been performing better than expected.
Mars, which employs about 10,000 people in the UK, said Hotel Chocolat’s luxury gifting and immersive brand experiences will boost its own presence in the region.
Andrew Clarke, global president of Mars Snacking, said: “The Mars and Hotel Chocolat businesses are highly complementary, and during the course of our discussions with Hotel Chocolat’s leadership it has also become clear that there is a very strong cultural fit – with purpose at the heart of both organisations, and a shared passion for quality and sustainability.”
Hotel Chocolat shareholders will receive £3.75 per share as part of the deal. Its shares were trading at about £1.39 when markets closed on Wednesday.
