Italy’s Ferrero goes hazelnuts for Thorntons

Kasmira Jefford
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The group is famous for its Ferrero Rocher chocolates
ITALIAN confectionery giant Ferrero International is hoping to treat itself to another box of chocolates after offering to buy Thorntons for £112m yesterday, sending shares in the ailing retailer soaring by 43 per cent.

The family-owned chocolatier behind Nutella, Kinder and Ferrero Rocher has offered to pay 145p per share in cash for Thorntons, reflecting a 43 per cent premium to Friday’s closing price.

Thorntons’ management has urged shareholders to back the offer.

“Ferrero is a successful global confectionery business with a strong family heritage and as such represents a good cultural fit for Thorntons,” chairman Paul Wilkinson said.

The deal comes after a tough year for Thorntons amid rising competition from newer brands and declining footfall at its high street stores.

In December, the 104 year-old company issued a profit warning after a cut in orders from two grocery chains and problems at its Derbyshire warehouse.

Ferrero said that following a deal it would launch a review to identify potential cost savings. However, it ruled out closing the factory and will also keep the Thorntons brand.

Ferrero said it has bought a 29.9 per cent stake in Thorntons and has the backing of owners of another 4.5 per cent.

Chief executive Giovanni Ferrero said: “We delivered our best ever results in the UK in 2014, giving us confidence that now is the right time to broaden our roots in this important market.”


1 Flin started his broking career with Dresdner Kleinwort in 2000, working in the mid-market with a large number of listed companies.

2 He joined Investec in 2009 and has worked on a number of IPOs including SCS Group. He also worked on Johnson Services’ £65.4m acquisition of London Linen Supply in May.

3 David is an economics graduate from University College London and an avid Tottenham Hotspur fan. When Spurs aren’t playing, he can be found on the golf course.

Also advising...
Investec is joint broker to Thorntons alongside Peel Hunt as well as acting as their financial adviser. Ferrero’s longstanding financial adviser is Rothschild, whose team is led by managing director Akeel Sachak.

When Pietro Ferrero came up with his idea of starting a new confectionary business in the 1940s, Italy’s Piedmont region was already famous for its chocolate. Its capital city Turin was the birthplace of Gianduja, a sweet chocolate spread containing about 30 per cent hazelnut paste, which was invented during Napoleon’s regency period. However, chocolate was expensive – particularly after the Second World War – and reserved for the wealthy or special occasions. In 1946 Ferrero decided to create an affordable version that could be enjoyed by everyone. He launched “pasta gianduja”, an early and solidified version of Nutella, that was sold wrapped in tinfoil. A spreadable version called Supercrema was launched a few years later. It was Ferrero’s son Michele Ferrero who renamed it Nutella in 1964 and relaunched the spread in its glass jar. He took over the business following his father’s death in 1949 and grew the chocolate firm into the giant it is today, developing Kinder in 1968, Tic Tacs the following year and Ferrero Rocher in 1982. With sales of around £6bn, the chocolatier is widely seen as Italy’s most valuable privately-owned company and turned Michele Ferrero into Italy’s richest man. The billionaire died at in February aged 89 and his son Giovanni took over as chief executive. Ferrero has made three acquisitions over the last three years that have included two hazelnut factories in Turkey and Italy and a Belgium confectionery supplier. Thorntons would be its first significant acquisition of a branded name after reportedly vetoing the idea of a bid for Cadbury in 2009.