Lindt & Sprüngli buys into Russell Stover’s box of chocolates
Move will make it third largest chocolate manufacturer in North America.
Months of speculation ended on Monday regarding who was going to acquire Russell Stover’s box of chocolates when Lindt & Sprüngli announced it had reached a deal to purchase the U.S.’s largest family-owned chocolate company for a reportedly $1.5 billion.
While some analysts were surprised by the price tag, Lindt & Sprüngli ’s chairman Ernst Tanner responded by calling the purchase, the “biggest and most important strategic acquisition to date” in the company’s history. He asserted that the move was “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.”
Last year Russell Stover posted more than $600 million in sales and was ranked 32nd in Candy Industry Magazine’s Global Top 100. Combined sales from Lindt, Ghirardelli, Russell Stover and Whitman’s brands will make Lindt & Sprüngli the No. 3 chocolate manufacturer in North America, the company says.
Russell Stover operates four manufacturing plants in the United States — two in Kansas, one in Texas and one in Colorado — and employs about 2,700 people. It also operates 35 retail outlets, most of which are in the central United States.
Both Tanner and Thomas Ward, president, ceo and co-owner of Russell Stover indicated that the acquisition was a perfect strategic “fit,” one that held great potential for the future in the dynamic and growing chocolate business.
Not only does the move expand the company’s U.S. chocolate portfolio with the addition of a variety of products from Russell Stover/Whitman's brands, including gift pralines, chocolates for St. Valentine's Day — one of the most important chocolate gifting occasions in the USA — Easter and Christmas, as well as sugar-free chocolates, it also provides access to Russell Stover’s distribution network, which includes roughly 70,000 drug stores across the United States and Canada.
Russell Stover was founded in 1923 in Denver. It was purchased by Louis Ward in 1960 and has been run by the Ward family since then. Tom and Scott Ward took over operations from their father, Louis in 1993, which was the same year the company acquired Whitman’s Candies. According to the Wichita Eagle, Forbes estimated the net worth of the Ward family at $1.8 billion.
A Bloomberg Business report cited Tanner as saying that the company’s successful track record in integrating Ghirardelli Chocolate Co. into Lindt’s operations after purchasing it in 1998 was key to brokering the deal.
Separately, Lindt & Sprüngli reported that first-half sales for fiscal year 2014 grew 9.2 percent, “well above the market average.” The company said that it had “succeeded in achieving above-average organic growth in all its core markets in Europe as well as in North American and Australia. Strong sales of its Lindt and Ghirardelli brands in North America led to double-digit gains in that market, the company added.