Wrigley Co. sold to Mars
Candy maker Mars Inc. is buying Wm. Wrigley Jr. Co., the confectioner behind Juicy Fruit and Doublemint gum and Life Savers candy, for about $23 billion in cash, the companies announced Monday.
The agreement, which includes an investment by billionaire Warren Buffett, has the potential to transform the globe's confectionary industry and could spawn a series of other combinations.
''First and foremost, this is a great transaction at a great price that provides tremendous value to Wrigley stockholders,'' Bill Wrigley, Jr., chairman of Wrigley's board, said in a statement. ''We see this as an historic opportunity to preserve what is special about the Wrigley company in terms of values and culture, while continuing to grow and develop our associates, invest in our brands and drive long-term generational growth.''
Family-owned Mars is the world's largest chocolate seller and makes M&Ms, Snickers bars and other candy.
Under the agreement, shareholders at Chicago-based Wrigley would receive $80 in cash for each share Wrigley share.
The companies said Wrigley will operate as a stand-alone subsidiary and will keep its headquarters in Chicago. Bill Wrigley Jr., the chairman will stay on and have the title executive chairman.
In a statement, Wrigley said, "We see this as an historic opportunity to preserve what is special about the Wrigley Company in terms of values and culture, while continuing to grow and develop our associates, invest in brands and drive long-term generational growth. So, from every perspective, I strongly support this transaction."
The $80-per share offer is a 28 percent premium to Wrigley's Friday closing price of $62.45 and the news sent Wrigley's shares into overdrive in early trading Monday. This morning, the stock was up more than 20 percent to $77.11 a share.
After the buyout is completed in six to 12 months, Wrigley would become a subsidiary of McLean, Va.-based Mars.
''When this transaction is completed, we will be proud to welcome Wrigley's associates to our company,'' Mars President Paul S. Michaels said in a statement. ''The strong cultural heritage of two legendary American companies with a shared commitment to innovation, quality and best-in-class global brands provides a great basis for this combination.''
Buffett's Berkshire Hathaway Inc. will purchase $2.1 billion minority equity interest in the Wrigley subsidiary once the deal is completed. The Omaha, Neb.-based company also offered $4.4 billion of subordinated debt to fund the deal.
''A good time to buy a really great business is when you can do it,'' Warren Buffett said on CNBC Monday, adding that he understands Mars and Wrigley better than the balance sheets of most major banks.
Among Wrigley's others brands are Orbit, Extra and Big Red gum and Altoids mints.
Wrigley was founded in 1891 and Mars in 1911.