Ferrero has bought US chocolate maker Fannie May Confections Brands in a deal the Italian chocolate group said would increase its product line-up in the market.
Fannie May, which produces chocolate under the Fannie May and Harry London brands, was founded in 1920 in Chicago. Ferrero will pay a total of US$115m in cash, adjusted for working capital, for the chocolate manufacturer.
Ferrero revealed it will also enter into a strategic partnership with Fannie May’s current owner, 1-800-Flowers.com, that will see selected Ferrero and Fannie May products included in the 1-800-Flowers.com gifting collections and e-commerce sites. 1-800-Flowers.com revealed it plans to stock Ferrero’s Nutella, Ferrero Rocher and Raffaello brands.
“The strategic commercial agreement with Ferrero will enable us to continue offering the iconic Fannie May and Harry London chocolate brands across our e-commerce and wholesale channels and expand our product offerings to include some of Ferrero’s world-renowned chocolate confectionery brands, including Nutella, Ferrero Rocher and Raffaello,” 1-800-Flowers.com CEO Chris McCann said.
Fannie May’s existing distribution channels include 1-800-Flowers.com’s e-commerce platform as well as telephone, and the QVC home shopping channel. The group also operates a network of 80 retail stores and is available through conventional retail. Additionally, the company undertakes private label and contract manufacturing.
The US firm operates a production facility in Ohio and distribution centres in Ohio and Illinois. The group employs 750 full-time staff.
Following the transaction, Ferrero indicated it plans to keep these facilities open and retain Fannie May’s existing management staff. Ferrero also said that it plans to grow Fannie May’s store network.
“Fannie May represents a strong strategic and cultural fit for Ferrero and we are happy that Fannie May’s talented people, premium brand and quality products will become part of the Ferrero Group,” Giovanni Ferrero, CEO of Ferrero, said.
“The US is an important growth market for Ferrero and we are excited about the opportunity to support and grow a great American brand as we continue to expand our presence in the US.”
Paul Chibe, the CEO of Ferrero’s operations in North America, added Fannie May offers a “valuable manufacturing, distribution and retail network” for Ferrero in the US.
“We plan to build on the Fannie May organisation to support the growth of the Fannie May and Harry London brands. We are confident there are significant opportunities to enhance Fannie May’s growth, leveraging Ferrero’s capabilities to sell new products through a substantially larger base of channels,” Chibe said.
The transaction is subject to customary closing conditions and regulatory approvals, and is expected to close by the end of May.