Ferrero to buy Thorntons for $178 million

Thornstons shares jumped 42% after the announcement

Posté le Tuesday, June 23rd 2015
Ferrero to buy Thorntons for $178 million
Italian chocolate giant Ferrero International agreed to acquire British chocolate retailer Thorntons Plc for $187 million, sending shares in of the suffering UK confectioner soaring by 42 percent.

Ferrero announced in a company statement on Monday that it will pay 145 pence a share, which is 43 percent more than the U.K. confectioner’s last closing price in London.

Ferrero said it will keep the Thorntons brand as well as the company’s factory in Alfreton, Dervyshire, which employs about 1,500 of Thornton’s 3,500 staff.

This is the first move since the death of Michele Ferrero, the patriarch of Ferrero, to grow the company through acquisitions. His son, Giovanni Ferrero, is the chief executive of the company. In a statement, he said: “We delivered our best ever results in UK in 2014, giving us confidence that now is the right time to broaden our roots in this important market.” Paul Wilinson, Thorntons chairman, added: “Ferrero is a successful global confectionery business with a strong family heritage and as such represents a good cultural fit for Thorntons.”

Founded in 1911, the British chocolate maker has been on the edge of bankruptcy for a few years and suffered from “melting” sales and profit margins. It still has 242 of its own stores and cafes in the UK and Ireland and a franchise estate of 158 outlets, with a revenue last year of around $352 million.

Ferrero is the world’s fifth-largest confectionery company by revenue. The company had sales of more than $9.58 billion in the fiscal year ending Aug. 31, 2014.