Confectionery giant Mars has announced it will buy Hotel Chocolat for £534 million to help the UK company expand overseas.
Hotel Chocolat said the deal would allow the brand to “grow further and faster”. The deal comes after the company suffered sinking demand for its products from cash-strapped consumers in its most recent financial year.
“We know our brand resonates with consumers overseas, but operational supply chain challenges have held us back,” said Hotel Chocolat chief executive Angus Thirlwell.
The chocolatier, which was founded as an online retailer in 2004, swung to a loss in the year to July, falling from a pre-tax profit of £21.7m to a loss of £800,000 reportedly due to inflationary pressures, weak consumer sentiment and the cost of restructuring efforts.
Hotel Chocolat said in a statement today (16) they considered the terms of the deal “to be fair and reasonable”, adding that Mars’s global supply chain and commercial relationships would help the company get the expansion of its business abroad back on track.
The company is mostly based in the UK with 124 shops, but has some overseas.
Mars, which employs around 10,000 people in the UK, says the deal will bring a “much-loved brand into its portfolio” and deepen its relationships with consumers.
“The UK has been an important market for Mars, and it expects this to be complemented by the acquisition of Hotel Chocolat, with its distinctive capabilities in product development, luxury gifting and immersive brand experiences,” The Guardian quoted a statement by Mars.
For Mars the acquisition is seen as a move into the higher value premium chocolate category. Nestlé made a similar move with its acquisition of Brazilian premium chocolate maker Grupo CRM earlier this year