Swiss candymaker Lindt & Sprüngli has agreed to purchase Russell Stover, the United States' third largest chocolate maker, in what is being described as a billion-dollar deal.
With the addition of Russell Stover, which will stay headquartered in Kansas City, Missouri, the Switzerland-based Lindt expects to rake in $1.5 billion in sales next year, according to company officials.
"We see in America, as in other places, that consumers move from the mass market product to higher-value products," Lindt Chairman and Chief Executive Ernst Tanner told Reuters in an interview on Monday.
"We've seen that in coffee and bread, in restaurants, and now also with chocolate, there's an upgrading under way."
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Best known for its pralines that were made famous by the movie "Forrest Gump," Russell Stover has annual sales of roughly $600 million and around $60 million in earnings before interest, tax, depreciation, and amortization, according to The Wall Street Journal.
Since 1969, the chocolate company has been privately owned by the Ward family, and has worked its way up to become the third largest in the country, behind Hershey and Mars.
"This biggest and most important strategic acquisition to date in Lindt & Sprüngli’s history is a unique opportunity for us to expand our North American chocolate business and will greatly enhance the group’s status in the world’s biggest overall chocolate marketplace," Tanner said in the Lindt statement.
Still, some industry experts say Lindt's move to buy Russell Stover is a bold one.
"Analysts said an acquisition of Russell Stover would be an unusual move for Lindt, which already has a strong presence in the U.S., through its ownership of the Ghirardelli Chocolate Co.," The Journal reported.
"Lindt's North America region, which includes the U.S., generated $943.2 million in sales last year, roughly a third of the company's total revenue, and posted organic growth of 11.4 percent," the newspaper continued.
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