Mars is paying $661 million for Britain’s biggest independent chocolate maker

Mars is buying Hotel Chocolat in a deal that values Britain’s largest independent chocolate maker at £534 million ($661 million) and could boost its growth prospects outside of the United Kingdom.

News of the deal sent Hotel Chocolat’s shares up 164% Thursday to within striking distance of the offer price of 375 pence ($4.65) per share. Mars’ cash offer represents a premium of almost 170% to the stock’s closing price on Wednesday — an amount one consultant described as “astounding.”

“The cash offer is… a ridiculous premium for what is fundamentally a business with limited future growth in the UK, and questionable performance internationally,” Jonathan De Mello, who runs UK-based retail consultancy JDM Retail, wrote on X, the platform formerly known as Twitter.

Hotel Chocolat was founded in 1993 by entrepreneurs Angus Thirlwell and Peter Harris who “were on a mission to make chocolate exciting again,” according to its website.

The brand opened its first store nearly 20 years ago in north London and has since grown to 131 UK stores, in addition to cafés and restaurants. It also has stores in Japan and a working cocoa farm, complete with a luxury eco-hotel, in the Caribbean.

In the most recent financial year, Hotel Chocolat posted what it described as “disappointing” financial results. The company’s revenue declined 10% to £205 million ($254 million) and it reported a loss of £6.2 million ($7.7 million). CEO Thirlwell, who will stay on under Mars, said the takeover would boost the brand’s growth prospects.

“We know our brand resonates with consumers overseas, but operational supply chain challenges have held us back,” he said in a statement. “By partnering with Mars, we can grow our international presence much more quickly,” he added, describing Mars as an “excellent long-term steward of the Hotel Chocolat brand.”

The end of another British brand

Brits are less convinced. The deal sparked a flurry of comments from X users lamenting the takeover of another homegrown British chocolate brand by a large American food company.

Some drew parallels with the multi-billion dollar buyout in 2010 of Cadbury’s by Kraft Foods — which later became Mondelez International (MDLZ) — in a deal that ended nearly two centuries of independence for the iconic Birmingham-based firm.

“Oh no. When Kraft bought Cadbury’s the quality went downhill,” wrote @sianreed93. “Hotel Chocolat, whilst expensive, is proper chocolate. Please don’t change a thing (except reduce the prices a little now you have bigger buying power).”

Mars, which makes the Mars bar, Snickers, Twix and M&Ms, has operated in the United Kingdom since 1932 and employs around 10,000 people in the country.

“Mars considers that the acquisition would further strengthen its commitment to the UK market, bringing a much-loved brand into its portfolio and deepening its relationships with consumers,” Hotel Chocolat said in the statement. “The UK has been an important market for Mars.”

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said Mars “clearly sees great opportunity” to expand Hotel Chocolat “into other markets, particularly in the airport retail sector.”