Swiss chocolate giant Lindt & Spruengli agreed on a billion-dollar deal to buy U.S. candy maker Russell Stover. The partnership makes Lindt the third largest chocolate maker in North America behind Hershey and Mars, owning 7.9 percent of the market.
While the exact price of the deal was not disclosed, the acquisition of the family-owned firm is expected to help exceed sales of $1.5 billion in North America in 2015. The move also places the European company strategically within the growing American market well above the competitor Nestle.
Lindt chairman and chief executive Ernst Tanner told Reuters that Russell Stover’s products, whose prices are slightly below Lindt and Ghirardelli brands, will help serve as a gateway to consumers’ appetite for higher-quality chocolates.
“We see in America, as in other places, that consumers move from the mass market product to higher-value products. We’ve seen that in coffee and bread, in restaurants, and now also with chocolate, there’s an upgrading under way,” he said.
Russell Stover, which sells its products in more than 70,000 drug stores, card and gift shops and grocery stores, was put up for sale earlier this year by the Ward family who acquired the company from the Stovers in 1960. The company is based in Kansas City, Missouri, and boasts annual revenues of $500 million.
Some of the most iconic Russell Stover products include the Whitman’s sampler chocolate box, which was made famous in 1994 in the movie “Forrest Gump.”
Lindt said sales grew 6 percent in the first half to 1 billion Swiss francs (1.34 billion U.S. dollars).