IL&FS arm in talks to buy Hershey's stake in India JV

IL&FS Investment Managers, the private equity arm of IL&FS, is in advanced talks to pick up the Hershey Company's 51% stake in its joint venture with the Godrej Group, a business newspaper said on Wednesday.

The Godrej Hersheys joint venture, which is likely to come apart due to differences in business strategy between the partners, is valued at Rs 550-600 crore, the report said, citing investment banking sources.

The deal will allow IL&FS to regain ownership of the firm as its private equity arm was the financial investor from whom Hershey had bought a 40% stake in 2007 for a reported $60 million, it said.

IL&FS Investment has signed the term sheet for the deal and is willing to put in additional funds to boost Hershey's Indian operations, the report said.

In July, the business daily had reported Godrej Consumer Products was looking to buy the 51% stake from Hershey's in its India joint venture.

Hershey said it does not comment on speculation and that it continues to operate its operations in India through its partnership with Godrej, the report added.

IL&FS and Godrej Group declined comment to the newspaper and could not be immediately reached for a comment by Reuters.