Godrej Industries will exit its joint venture with Hershey Co after the US chocolate maker agreed to buy out the 49 per cent equity it does not own, thereby taking 100 per cent control of the business in one the world's biggest chocolate markets.

With this, the Godrej Group will be entirely exiting the foods JV Godrej Hershey Limited, which now has local brands such as Jumpin', Nutrine, Mahalacto and Sofit.

Godrej Industries Limited (GIL) on Friday said it has entered into a share purchase agreement to divest its 43 per cent stake in Godrej Hershey Limited to Hershey Company for an undisclosed consideration.

The transaction is expected to close by the end of the second quarter of the current financial year ending September 2012, the company said.

Following the transaction, the company will become a wholly-owned subsidiary of Hershey.

''Over the last few years, we have been following a disciplined approach to doubling down on our core businesses to drive sustained and profitable growth. We have been making clear choices to focus on areas where we have a competitive advantage and that provide the best growth opportunities for us.

Our decision to divest our stake in the Godrej Hershey joint venture is in line with this focused portfolio strategy,'' Adi Godrej, chairman of the Godrej Group, said.

''We have enjoyed a productive relationship with the Hershey Company. We believe that the Godrej Hershey JV has provided a strong platform for Hershey to establish a presence in India and will enable them to evolve into a leader in the food and beverage space in India.

We wish the Hershey team all the very best in taking the company to the next level. I am very confident that our renewed focus on our core businesses and our commitment to superior value creation will continue to deliver strong results for all of our stakeholders,'' he added.

Hershey said it is buying out Godrej Industries Ltd, which holds 43 per cent stake in the JV and another minority shareholder who holds 6 per cent equity. The company also did not disclose the price.

Hershey will assume about $47.6 million in debt, and will own the Maha Lacto and Nutrine candy brands and the Jumpin and Sofit beverage brands, as well as the related factories.

Post closure of the transaction, the company will become a wholly owned subsidiary called Hershey India.

For the fiscal year ended 31 March 2012, Godrej Hershey Limited had net sales of Rs386 crore and losses of Rs74 crore.

Hershey said the deal does not change its financial outlook.

Hershey shares were down 30 cents, or 0.4 per cent, at $72.86 on the New York Stock Exchange.