The Hershey Company, the world’s largest chocolate manufacturer based in the U.S., is anticipated to purchase Amplify Snack Brands Inc., a U.S. based firm offering ready-to-eat snacks to its consumers, for nearly USD 1.6 billion. Some of Hershey’s key officials have stated that the strategic move is aimed at the expansion of its portfolio across the rapidly emerging snacks sector in the country. According to industry analysts, EPS (earnings per share) has resulted in ten percent increase in 2017 for Hershey’s, evaluating the overall earnings per share equal to USD 24 billion.
Reliable sources have cited that the acquisition has valued each share of Amplify Snack Brands at USD 12 per share. It also depicts a seventy-one percent premium on the closing price of the latter’s share estimated at USD 7 per share. Industry analysts are of the opinion that the market value of the former’s outstanding shares is priced at USD 537 million, while its overall debt till September 2017 was estimated at USD 590.5 million.
It has been observed that the confectionery sector across the U.S. has been witnessing a consolidated growth over the past few years with the declining demand for chocolates. In addition to the acquisition agreement, the sector has witnessed myriad mergers & acquisitions, joint ventures, and strategic collaborations. In one such pacts witnessed across the U.S. in November 2017, Mars Inc., a global producer of pet diet, confectionary, and other food items, had made a minor investment in Kind Bar, a snack producing firm based in the U.S.
Authentic sources state that Hershey is likely to lay a claim for purchasing Nestle S.A.’s confectionary segment. In a major boost to confectionery industry in the country, The Kellogg Company signed a USD 600 million agreement with RxBar, a protein bar manufacturer, in the last quarter of this year. Experts are of the view that these agreements will not only spur the confectionery sector, but will further accelerate the expansion of food & beverages as well as packaging sectors across the U.S.