Mars, Buffett Team Up to buy Wrigley
Mars, Buffett Team Up to buy Wrigley
Mars, Buffett Team Up to buy Wrigley
$22 Billion Deal Would Reshape Candy Industry
Mars Inc. and Warren Buffett's Berkshire Hathaway Inc. were close to a pact to acquire Wm. Wrigley Jr. Co. for more than $22 billion, according to people familiar with the matter, in a deal that would remake the global confectionery landscape.
A deal would unite two icons of the
The transaction was expected to be announced as early as Monday, the people said. Both companies declined to comment.
Terms of the deal weren't immediately clear, but Wrigley has a stock market value of about $17.3 billion and it appeared that the buyers were prepared to offer a rich premium.
Under one scenario under discussion,
A deal would expand Mars's already considerable global reach. Wrigley generates the majority of its sales outside of the
A deal could spark further consolidation in the global candy business. Hershey Co. and Cadbury Schweppes PLC, for example, could be forced to merge. The two discussed a deal last year, but talks fell apart. Cadbury in May will split off its beverage unit, which includes Dr Pepper and 7Up, potentially paving the way for a deal. Hershey has been hurt in recent years by competition from Mars, its longtime rival.
In 2005, Wrigley bought Kraft's candy assets, including Altoids and LifeSavers, for about $1.5 billion. Wrigley also recently purchased a Russian chocolate company. The family-controlled company was close to a deal to acquire Hershey Co. in 2002 for about $12.5 billion, but talks fell apart at the last moment.
A weak dollar and strong foreign demand have boosted Wrigley's profit recently. But the company has struggled in the
Wrigley's products include Extra, Eclipse and Orbit gums.
If successful, a deal for Wrigley would bring together two companies controlled by intensely private dynasties: the Mars of northern Virginia and Wrigleys of Chicago. Following the death of patriarch Forrest Mars Sr. in 1999 at the age of 95, speculation grew that the company would be sold to Nestle SA or another global company, but Mars has held firm.
A sale would end Wrigley's independence. The company was founded in the late 19th century by William Wrigley Jr. As a boy, he ran away from
Soon he was making his own gum. Juicy Fruit hit shelves in 1893. By 1920, he was making nine billion sticks of gum a year and had become the world's largest advertiser of a single product. In 1923, the company went public.
The Wrigley family helped build
Mr. Buffett is famous for confidence in the staying power of iconic consumer brands such as Coca-Cola. Though he normally does deals without a partner, he has long admired Mars.
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