The world's largest chewing gum manufacturer Wrigley has made its presence felt in the European chocolate market with the acquisition of a leading Russian confectionery company in a $300m (€232.5m) deal which will increase the gum giant's global confectionery footprint.
This week the group announced it had purchased an 80 per cent share in A. Korkunov with the remaining 20 per cent to be acquired over time.
The deal marks the first time Wrigley as crossed over from the gum sector into chocolate and will give the company a greater share in the growing Eastern and Central European markets - analyst group Euromonitor forecasts that, by 2009, chocolate consumption in Russia will be higher than in the UK.
Wrigley said net cost of the transaction represented triple the company's 2006 sales and would be offset by $55m (€42.6m) in cash tax benefits.
A. Korkunov, the seventh largest chocolate manufacturer in Russian, has an estimated value of €3.7bn and holds the number two position in premium boxed-chocolates. Its production factory in Moscow produces boxed goods alongside loose chocolates and bars.
Wrigley executive chairman Bill Wrigley Jr said: "Entering into the premium chocolate category is not only a great strategic fit and an expected driver of new growth opportunities in one of our top priority global geographies, it also represents an important addition to our competencies and has the long-term potential to create value in marketplaces around the world."