Turkish owner of Godiva chocolate exploring sale of Japanese business: Sources

LONDON-Reuters

Yıldız Holding, the Turkish owner of Godiva chocolate, is exploring a sale of the high-end chain’s Japanese business in a deal that could fetch around $1.5 billion, according to two sources familiar with the matter.

The process to sell the business is expected to start in the coming weeks, said the sources, who declined to be named as the situation is private.

Yıldız, which also owns Istanbul-listed biscuit maker Ülker, said in a statement that Japan was one of its most successful regions and continues to grow.

It did not comment further.

Earlier this year, family-owned Yıldız, which also owns McVitie’s biscuits, agreed to refinance $5.5 billion in debt.

Godiva sells its chocolate through hundreds of boutiques in more than 80 countries as well as wholesale through other stores. It competes with upscale brands such as Lindt.

Its Japanese business has revenue of around $350 million a year and is likely to appeal to companies or investors with experience in Japan, a unique market grappling with an ageing population, one of the sources said.

This could include rival confectioners, retailers or private equity funds, the source said, noting also that diversified Japanese trading groups, which include Mitsubishi and Itochu, might also make sense.

Rival British chain Hotel Chocolat, which is much smaller than Godiva, said last month that it was close to pressing the button on further overseas expansion.

Because chocolate is seen as an indulgent treat, it tends to be less price-sensitive than other types of food, and therefore is often more profitable.

Earlier this year, Ferrero bought Nestle’s U.S. confectionery business for $2.8 billion, which analysts estimated to be more than 20 times earnings before interest, tax, depreciation and amortization. The Godiva business is likely to fetch a higher multiple, given its premium position.