Ferrero is buying Ferrara

Italian family-owned confectioner will acquire a U.S. candy maker with a similar name and a contentious family history.

By Barbara Spector

In a move that has challenged proofreaders working for the business press, Ferrero International SA, an Italian family-owned confectioner whose products include Nutella, Kinder and Tic Tacs, has agreed to acquire Ferrara Candy Co., the U.S. maker of Lemonheads, Red Hots and Atomic Fireballs. Although terms weren’t disclosed, the Wall Street Journal cited an unnamed source who estimated that Ferrero (the world’s fourth-largest confectioner by market share) paid about $1.3 billion for Ferrara.

Ferrara, formerly known as Ferrara Pan Candy Co. and based in Chicago, has been owned by a private equity group, L Catterton, since 2012; before that, the company had been family-owned. Founder Salvatore Ferrara, a baker, started making candy-coated almonds in 1908.

In May 2011, family strife at Ferrara Pan resulted in the police being called to a board meeting at the company. Crain’s Chicago Business reported at the time that some family shareholders were unhappy with their dividend payments and what they saw as lavish spending by third-generation CEO Salvatore Ferrara II. Ferrara was briefly ousted by the company but soon reinstated.

In 2012, Catterton acquired Ferrara Pan and merged it with Minnesota-based Farley’s & Sathers Candy Company, maker of Brach’s, Chuckles, Jujyfruits and Now & Later. Salvatore Ferrara II worked at the combined company until March 2014, when he joined Haribo, a German candy company. That same month, according to the Tribune, authorities in Naples, Fla., alleged that he took a swing at a female relative during an argument in a restaurant. He died of esophageal cancer in December 2014.

Ferrero has dealt with its own -- less volatile -- family dynamics over the years. Second-generation owner Michele Ferrero, who invented Nutella, grew the company from a small bakery and café into a candy powerhouse but ran it the same way for six decades. His sons Pietro and Giovanni became co-CEOs in 1997, but Michele continued to hold sway over the business until his death in 2015.

Pietro Ferrero died in April 2011 at age 47 in a cycling accident in Cape Town, where he had been on a business trip with his father. Giovanni Ferrero became the sole CEO and, after the death of his father, overhauled the company, which increased its sales and global market share, acquiring companies such as Fannie May and Thomas, a British brand. In March 2017, Ferrero named non-family member Lapo Civiletti as CEO; Giovanni Ferrero became executive chairman.