Godiva transforms into a Turkish delight (28.12.2007)

The sticky but exquisitely Belgian world of pralines, truffles and cocoa butter is about to be transported to the land of Turkish Delight.

Godiva Chocolatier, the Belgian chocolate maker, is to being sold by Campbell Soup Company to Yildiz Holding, a firm based in Istanbul that owns Ulker Group, a Turkish biscuit conglomerate.
Yildiz is paying Campbell $850 million (£423.5 million) to secure control of Godiva.

The Philadelphia soup company has owned the luxury chocolate business since 1974 but decided in August to put it up for sale after a strategic review concluded that exotic chocs did not sit well in a firm devoted to mass-market products, such as V-8, the drinks brand, soups, tinned spaghetti and pet food.

The buyer, Yildiz Holding, owns Ulker, a big Turkish conglomerate with a major business in food, manufacturing biscuits, sweets as well as chocolate.

Ulker had sales of $7.4 billion last year and recently claimed a 57 per cent share of the Turkish chocolate market.

Douglas Conant, the chief executive of Campbell, was pleased with the price obtained for Godiva, which he said represented a multiple of nearly 15 times Godiva's earnings before interest, tax and depreciation.

"The sale price reflects the strength of Godiva's business," he said, and suggested that the deal would allow Campbell to sharpen its focus on simple meals — soups, snacks and beverages.

Analysts had been hoping for an even higher price for Godiva, suggesting a figure of $1 billion.

The sale of Godiva is another victory for globalisation and the steady advance of emerging market firms into European and North American sectors.

However, it is unclear how the Godiva business will fit within Ulker's food manufacturing operations and distribution channels, which have more in common with the logistical machine of the Campbell Soup Company than a specialist luxury brand.

Godiva was founded in 1926, when Joseph Draps, a Brussels artisan, opened a shop in Grande Place in the Belgian capital, using the legend of Lady Godiva, who rode naked through the streets of Coventry, to represent the sensuous appeal of his chocolates.

Today, the business has sales of $500 million through its own boutiques, franchised shops, posh department stores and over the internet.

It still makes chocolates in Belgium but it also has a factory in the US, where the firm has been selling its chocolates since 1966