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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 18, 1996
HERSHEY FOODS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware I-183 23-0691590
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
100 Crystal A Drive, Hershey, Pennsylvania 17033
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (717) 534-6799
Page 1 of 4 Pages
Exhibit Index - Page 3
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INFORMATION TO BE INCLUDED IN REPORT
Item 5. Other Events
On October 18, 1996, Hershey Foods Corporation announced that it had
reached a preliminary agreement with Huhtamaki Oy, the international foods
company based in Finland, to acquire its Leaf North America confectionery
operations and to sell to Huhtamaki Hershey's European confectionery
operations. Huhtamaki will retain ownership of the trademarks used in its
Leaf North America operations and will license them to Hershey. The price
to be paid by Hershey for Huhtamaki's North American confectionery
operations is US$440 million and the price to be paid by Huhtamaki for
Hershey's European operations is US$110 million. The transaction is
subject to approval by the Boards of Directors of both companies and
certain governmental agencies. A copy of the press release dated October
18, 1996 announcing the acquisition and sale is incorporated herein by
reference and a copy is filed herewith as Exhibit 99.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Dated: October 23, 1996
HERSHEY FOODS CORPORATION
By /s/ Robert M. Reese
Robert M. Reese
Vice President,
General Counsel and Secretary
Page 2 of 4 Pages
Exhibit Index - Page 3
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Exhibit Index
Exhibit No. Description
99 Press Release dated October 18, 1996
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Exhibit 99
FOR IMMEDIATE RELEASE CONTACTS
October 18, 1996 Mr. John Long
717-534-7641
Mr. Timo Peltola, CEO
Huhtamaki
358-9-6868 8388
Mr. Keijo Suila, President
Leaf Group
31-20-656-2100
HERSHEY TO ACQUIRE LEAF'S NORTH AMERICAN OPERATIONS
AND HUHTAMAKI TO ACQUIRE GUBOR AND SPERLARI
HERSHEY, PA -- Hershey Foods Corporation, one of the leading
confectionery companies in North America, and Huhtamaki, the
international foods company based in Finland, have reached
preliminary agreements on brand licensing and acquisitions
involving their North American and European confectionery
interests.
According to the agreement, Hershey will acquire Huhtamaki's Leaf
North America confectionery operations for a purchase price of US
$440 million plus a royalty for the license of Leaf's North
America confectionery brands from Huhtamaki. Correspondingly,
Huhtamaki will acquire Hershey's European confectionery
interests, the German praline manufacturer Gubor and the Italian
sugar confectionery company Sperlari, for a purchase price of US
$110 million. The transaction is expected to be completed by
year-end, subject to approval by both companies' boards and by
appropriate regulatory authorities.
Hershey Foods estimates the loss on disposal of its two European
businesses will be approximately US $45 million, or $.29 per
share.
Huhtamaki will retain the ownership of Leaf's North American
trademarks, such as Jolly Rancher, Whoppers, Milk Duds, Good &
Plenty, PayDay and Heath, and will receive an annual royalty on
Hershey's sales of these brands. Leaf's North American
confectionery sales in 1995 were US $460 million (which is net of
certain promotional expenses), while Gubor and Sperlari had
combined net sales of US $210 million.
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"We are excited about this transaction with Huhtamaki," said
Kenneth L. Wolfe, Hershey's Chairman and Chief Executive Officer.
"It will allow each company to focus on their respective core
markets. The consolidation of Leaf's North American
confectionery operations into our current business will allow us
to leverage our existing capabilities, to create synergies and to
better serve both customers and consumers."
Huhtamaki's Chief Executive Officer Timo Peltola said that the
transaction was motivated by shareholder interest. "Leaf's
profitability in North America has been lower than in Europe.
The same was true for Hershey's European business, compared to
their North American levels. The arrangement will result in
higher returns for both companies."
Peltola adds: "With the Leaf brands no doubt thriving and
generating royalty income in Hershey's capable hands, we can
concentrate more resources on building Leaf's growing European
and Asian businesses. As such, Gubor and Sperlari will
strengthen our European network in an important way."
