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Saturday, July 12, 2014

Swiss chocolate maker Lindt near deal to purchase Russell Stover -report, (NYSE: HSY)

Swiss-based chocolate maker Lindt & Spruengli is in advanced discussions to acquire family-owned U.S. candy business Russell Stover, and the two companies could announce an agreement as early as next week, the Financial Times reported on Saturday. Quoting unnamed sources close to the matter, the Financial Times said that while it is unclear whether an exact price had been agreed upon, a figure of $1.4 billion is being discussed. The newspaper reported that talks were ongoing and no deal was certain.Russell Stover, known for its boxed chocolates, is the third-largest U.S. candy company by sales. Lindt is the Swiss-based maker of Lindor chocolate balls and gold foil-wrapped chocolate bunnies.A deal with Russell Stover would enable Lindt to diversify further beyond the European market, where it gets a big chunk of its revenues, and get a strong presence in the U.S. market. Russell Stover has annual sales of about $600 million, the Financial Times reported.The Ward family put Russell Stover up for sale earlier this year and has been working with Goldman Sachs, the investment bank, to find a buyer, the newspaper reported. The company has won the attention of a number of private equity firms as well as strategic buyers including Hershey Co and Godiva, the newspaper said.

The Hershey Company is a producer of chocolate in North America and a provider in chocolate and sugar confectionery. Shares of HSY traded higher by 0.18% or $0.17/share to $96.45. In the past year, the shares have traded as low as $89.28 and as high as $108.69. On average, 987586 shares of HSY exchange hands on a given day and today's volume is recorded at 666072.