Mumbai: US chocolate maker Hershey Co. has received the Foreign Investment Promotion Board’s approval to buy 51% in Godrej Beverages & Food Ltd for Rs238 crore, according to a government statement released on 2 April 2007. Hershey will buy shares in Godrej Beverages from IL&FS or subscribe to fresh stock through its wholly owned subsidiary, Hershey Netherlands BV, the statement said. The deal is subject to further clearances.
Hershey would also give Godrej Beverages the licence to use some of its trademark rights and know-how for a royalty of less than 5% for domestic sales and 8% for exports, and a lump sum payment of not more than $2 million (Rs8.8 crore), it said.
Earlier, a source close to the deal said Hershey would buy 51% in Godrej Beverages in a deal that valued the Indian firm at about $100 million. The maker of Hershey’s Kisses and Reese’s peanut buttercups would buy the 40% stake held by the private equity arm of IL&FS, as well as additional shares, the source said.
A senior executive of the Indian firm said Hershey and Godrej Beverages would hold a joint media briefing in Mumbai on 3 April, but declined to give more details.