INTERNATIONAL BUSINESS; Swiss Maker Of Chocolate Will Acquire Brach's Candy (Published 2003) (2024)

In seeking to expand into the world's largest confectionary market, the Swiss maker of bulk chocolate, Barry Callebaut said today that it would buy the struggling penny-candy maker Brach's Confections Inc. for a symbolic $1 and an agreement to assume $16 million of debt.

Barry Callebaut also agreed to help Brach's with its revamping, which is expected to cost up to $48 million over the next five years.

Brach's, which is based in Illinois and known for its butterscotch-flavored candies and the perennial Halloween candy corn, is a mid-tier confectioner, fighting the world's big four candy makers -- Nestlé, Hershey, Mars and Kraft -- for space in the consumer's stomach and the retailer's shelf. It has been hurt by frequent management changes and an antiquated plant in Chicago.

It employs 1,600 people worldwide and had sales of $340 million in its 2002-3 fiscal year that ended in August. It gave no profit figures.

Barry Callebaut, which stresses its quality, is the world's largest maker of chocolate that is sold to other food industry producers like bakeries or cereal manufacturers, which use it to make final products. In buying Brach's, executives said they were turning Callebaut into a bean-to-shelf company that would also sell finished chocolate and confectionary products to consumers.

The chief executive of Barry Callebaut, Andreas Schmid, said today that the deal would give it a toe in the door of the $21 billion confectionary market in the United States.