.S. chocolate maker Hershey Co. has received India's approval to buy 51 percent in Godrej Beverages & Food Ltd. for 2.38 billion rupees ($55 million), a government statement showed on Monday.
Hershey will buy shares in Godrej Beverages from IL&FS or subscribe to fresh shares through its wholly owned subsidiary, Hershey Netherlands BV, the statement showed.
The deal is subject to further clearances.
Hershey would also license to the Indian company some of its trademark rights and knowhow for a royalty of less than 5 percent for domestic sales and 8 percent for exports, and a lump sum payment of not more than $2 million, it said.
Earlier, a source close to the deal told Reuters Hershey would buy 51 percent 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 butter cups would buy the 40 percent 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 Tuesday, but declined to give more details.
Godrej Beverages, a unit of Godrej Industries Ltd. sells tea, edible oils, beverages, packaged foods, cooking pastes and confectionery.
It acquired Nutrine, India's largest confectionery brand, last year, for about 2.5 billion rupees and competes with Cadbury Schweppes' ) Cadbury India, Nestle India Ltd. and Amul India.
Source : Reuters