The producer of Nutella, Ferrero has officially signed a deal to buy over U.S. confectioner Fannie May from online retailer 1-800-FLOWERS.COM (FLWS.O) at the price of $115 million. As reported by Reuters, the move is aimed to further enhance the Italian company's presence in the overseas market.
Founded in Chicago in 1920, Fannie May produces chocolate bars, praline and chocolate snacks that are marketed online mainly via 1-800-FLOWERS.COM.
"The United States represents an important market with a high growth potential for Ferrero and we are excited to support the development of a great American brand," Ferrero Chief Executive Giovanni Ferrero said in a press release following the deal.
Ferrero is aiming to hit $11 billion in sales this year, with distribution spread across more than 160 countries. The company ventured into the U.S. market in 1969 with the introduction of Tic Tac breath mints and then brought Ferrero Rocher pralines and Nutella hazelnut spread.
The United States is currently the fifth-biggest market contributing into the Italian group's revenue, with almost 10 billion euros ($10.7 billion) reported for the financial year ended in August.
According to the deal, Ferrero said it would sign a commercial partnership with 1-800-FLOWERS.COM and let the online retailer offer some of its and Fannie May's products on its platform.
To recap, Fannie May was founded in Chicago in 1920 and it became a well-known producer of premium chocolates across the Midwest. However, the company filed for Chapter 11 bankruptcy protection in 2004, attributing it to the aggressive expansion after the 1992 acquisition of Fanny Farmer Candies, an East Coast chain. The assets and brands were bailed out of bankruptcy by Alpine Confections, which reopened 31 company-owned stores but closed the Chicago plant and relocated manufacturing to Ohio.
The company was bought over by 1-800-Flowers.com in 2006 for $85 million. Since then, Fannie May has 80 stores and continues to operate a production facility in Ohio, with distribution centers in Ohio and Chicago with a total of 750 full-time employees.