Hershey completes $921m deal to buy owner of crisps brand Tyrrells

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Hershey is expanding further beyond chocolate, agreeing to buy the owner of of crisp brand Tyrrells for $921m (£686m).

The US sweet giant agreed to buy Amplify Snack Brands at $12 a share, a 71 per cent premium to Friday’s closing price of $7 a share.

Amplify, based in Austin, Texas, has about $600m in debt and has seen its stock value dive since it went public in 2015.

Hershey’s move signals the intent of new chief executive Michele Buck to lead consolidation in the snacks industry after the maker of Kisses candy rejected a takeover bid from Oreo maker Mondelez. During a March investor meeting, Hershey’s management said it was particularly interested in companies that had accelerated growth in the US snack industry. Hershey shares have gained 10 per cent this year, valuing the company at $24bn.

The US confectionery business has been consolidating amid sluggish demand for chocolate. Among other deals in the sector, Mars, the maker of M&Ms and Snickers, purchased a minority stake in another snack company, Kind Bar, last month. Kellogg Co. signed a $600m deal for protein bar maker Rxbar in October. Hershey has been mentioned as one of the companies planning to bid for Nestle’s US confectionery division.

Big marketers like Hershey have been seeking growth from niche acquisitions amid waning consumer enthusiasm for mainstream brands. Amplify also owns Paqui tortilla chips and Oatmega bars made with whey protein from grass-fed cows in New Zealand.

Amplify’s shares have declined more than 60 per cent to $7 since a public offering in August 2015, when investors paid $18 a share. Its third-quarter results this year missed analysts estimates and the company trimmed forecasts for the full year.

Bloomberg