Hershey Mexico, a subsidiary of US confectionery giant Hershey Foods, has announced it has entered into an agreement to acquire Mexican confectionery company Grupo Lorena.
“Grupo Lorena’s solid brands in key consumer segments will strengthen our leadership position in the Mexican market,” said Juan-Carlos Zayas, director of marketing, Hershey Mexico.
Jalisco-based Grupo Lorena’s main products include Pelon Pelo Rico and Crayon. The company had sales of more than US$30m in 2003.
“It (the acquisition) significantly increases our existing business in Mexico and supports our strategy of profitably building scale in the key North American market,” said Richard H. Lenny, Hershey Foods’ chairman, president and chief executive officer.
“Lorena also will deliver expanded retail channel and customer growth opportunities for Hershey, both in Mexico and the United States. We look forward to building Grupo Lorena’s brands with the Hispanic consumer and leveraging its capabilities to introduce innovative Hershey products to the high-growth Hispanic segment,” he added.
The acquisition is expected to be completed during the fourth quarter of 2004 and is subject to the customary closing conditions and regulatory approval. The acquisition is expected to be slightly accretive in the first 12 months. Terms of the agreement were not disclosed.