Chocolate and confectionery maker, The Hershey Company, is finally set to enter the Indian market by acquiring the stakes in Mumbai-based Godrej Beverages and Foods.

Godrej executives declined to comment on the matter, sources in the know said the deal between Hersheys and GBFL had been signed a while ago. Hersheys has acquired 51 per cent stakes in GBFL, acquiring 40 per cent stakes by IL&FS. The remaining stakes is expected to be acquired from Godrej Industries and A Mahendran, managing director, GBFL who also holds stake in the company.  Post acquisition, Mahendran and Godrej Industries' stake in GBFL will together come down to 49 per cent.

Richard H Lenny, chairman, president and CEO, The Hershey Company is expected to announce the company's India plans on Tuesday.

GBFL, which has a turnover of about Rs 400 crore (Rs 4 billion) has a presence in categories such as juices, soya foods, tomato puree and bakery fats with brands such as Sofit, Xs and Jumpin. GBFL acquisition of confectionery brand Nutrine has a significant presence in the confectionery category in India. Post acquisition, Hersheys is likely to tap this distribution network to introduce its own brands in India.

For Hershey's entry into the Indian market comes at a time when sales growth in the US, its biggest market, has slowed down considerably. The US accounts for almost all of Hershey's sales according to Professor of International Business, Tuck School of Business, Vijay Govindrajan.

The Indian market for confectionery on the other hand is at a nascent stage with the global companies such as Cadbury and Nestle as well as homegrown brand Amul not quite being able to increase the per capita consumption in India.

Industry estimates shows that the per capita consumption of chocolate in India is about 300 grams as compared to 1.9 kg in a more mature market such as the UK.

Some of Hershey's best known brands are Hershey's, Reese's, Hershey's Kisses and Ice Breakers. Apart from this, it also has a presence in categories such as chocolate drink mixes, baking ingredients, dessert toppings and beverages.