Lindt & Spruengli AG’s share price at a 25-year high, to acquire Russell Stover Candies Inc. in its largest takeover

The biggest maker of premium chocolate in the world – Chocoladefabriken Lindt & Spruengli AG revealed in a statement today that it agreed to purchase Russell Stover Candies Inc. in a deal that would help the company become the third-largest chocolate maker in North America. Following the announcement, the shares of the Swiss company rose to the highest in at least 25 years.

Mr. Ernst Tanner, who is the current Chief Executive Officer of Lindt AG said in the companys statement, which was cited by the Financial Times, that the takeover “is a unique opportunity for us to expand our North American chocolate business and will greatly enhance the group’s status in the world’s biggest overall chocolate marketplace”. As reported by the Financial Times, Mr. Tanner also said that this would be the “biggest and most important strategic acquisition to date in Lindt & Sprüngli’s history”.

According to the companys statement, the takeover is expected to be the largest one in the entire history of Lindt AG. The company, however, did not provide further information on the acquisitions price. Lindt AG only explained that the transaction is to be financed through cash and bank loans.

The company also shared that the purchase of Russell Stover Candies Inc. is expected to add annual sales of about 500 million dollars, which will boost the Lindts North American sales to more than 1.5 billion dollars in 2015. North America has proved itself as one of the key markets for the Switzerland-based company, especially considering the fact that about one third of the Lindts revenue last year was generated there.

The annual sales of Russell Stover Candies Inc. are estimated at about 600 million dollars, and its earnings before interest, tax, depreciation and amortization amount to about 60 million dollars. The worldwide revenues of Lindt & Spruengli AG last year were estimated at 2.88 billion Swiss francs (3.2 billion dollars)

Chocoladefabriken Lindt & Spruengli AG was adding 2.09% to trade at 55,885 Swiss francs per share by 12:26 GMT (the highest price since at least October 1989), marking a one year change of +30.06%. According to the information published on the Financial Times, the 11 analysts offering 12-month price targets for Chocoladefabriken Lindt & Spruengli AG have a median target of 45,000, with a high estimate of 59,500 and a low estimate of 39,500. The median estimate represents a -17.79% decrease from the last price of 54,740.