Mars Acquires Hotel Chocolat in a £534 Million Deal

In a significant move, Mars is set to acquire Hotel Chocolat, the largest independent chocolate maker in Britain, in a deal valued at £534 million ($661 million). The acquisition is expected to enhance Mars’ growth prospects, especially outside the United Kingdom.

Upon news of the deal, shares of Hotel Chocolat surged by 164% on Thursday, approaching the offer price of 375 pence ($4.65) per share. Mars’ cash offer represents a premium of nearly 170% compared to the stock’s closing price on Wednesday, a figure described by some experts as “astounding.”

Jonathan De Mello, who heads the UK-based retail consultancy JDM Retail, expressed his skepticism about the premium, stating, “The cash offer is… a ridiculous premium for what is fundamentally a business with limited future growth in the UK, and questionable performance internationally.”

Hotel Chocolat, founded in 1993 by entrepreneurs Angus Thirlwell and Peter Harris, has grown to become a prominent chocolate brand in the UK. With 131 stores, cafés, and restaurants across the country, as well as international locations in Japan and a cocoa farm in the Caribbean, the brand has made its mark. However, the company reported a decline in revenue by 10% to £205 million ($254 million) and a loss of £6.2 million ($7.7 million) in the most recent financial year.

CEO Angus Thirlwell, who will continue under Mars, expressed optimism about the acquisition’s potential to boost the brand’s growth. He acknowledged operational challenges and stated, “By partnering with Mars, we can grow our international presence much more quickly,” describing Mars as an “excellent long-term steward.”

While Thirlwell sees the partnership as a strategic move, some Brits are expressing concerns reminiscent of the 2010 acquisition of Cadbury by Kraft Foods. Users on social media, including X, lamented another American food company taking over a renowned British chocolate brand.

Mars, known for iconic treats like Mars bars, Snickers, Twix, and M&Ms, has been present in the UK since 1932 and employs around 10,000 people in the country. The acquisition of Hotel Chocolat is seen as a move to strengthen Mars’ commitment to the UK market and expand its portfolio with a beloved brand. Susannah Streeter, head of money and markets at Hargreaves Lansdown, suggests that Mars sees a “great opportunity” to extend Hotel Chocolat’s reach, particularly in the airport retail sector.