Hershey near US$1.6bil deal for SkinnyPop maker

TOKYO: Hershey Co is near a US$1.6bil deal to buy Amplify Snack Brands Inc, according to CNBC, which cited unidentified sources familiar with the matter.

The deal values Amplify at US$12 a share, CNBC said, which would represent a 71% premium to last Friday’s closing price of US$7 a share. Amplify, based in Austin, Texas, has a market cap of US$537mil and markets brands including SkinnyPop popcorn.

Total debt as of Sept 30 was US$590.5mil, according to data compiled by Bloomberg.

Hershey’s move signals the intent of new chief executive officer Michele Buck to lead consolidation in the snacks industry after the maker of Kisses sweets rejected a takeover bidfromOreos-makerMondelezInternational Inc.

During a March investor meeting, Hershey’s management said it is particularly interested in companies that have accelerated growth in the US snack industry.

Hershey shares have gained 10% this year, valuing the company at US$24bil.

The US confectionery business has been consolidating amid sluggish demand for chocolate.

Among other deals in the sector, Mars Inc, the maker of M&Ms and Snickers, purchased a minority stake in another in snack company, Kind Bar, last month.

Kellogg Co signed a US$600mil deal for protein bar maker Rxbar in October. Hershey has been mentioned as one of the company’s planning to bid for Nestle SA’s US confectionery division. — Bloomberg