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CHICAGO -- In a joint announcement today, Mars Inc. will acquire Wm. Wrigley Jr. Co., for approximately $23 billion in cash, a deal that will forever change the confectionary industry's topography.
"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 released 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."
The family owned McLean, Va.-based Mars company famous for M&Ms and Snickers, will add Juicy Fruit, Doublemint, Orbit, Altoids and Life Savers to its roster or products. Under the agreement, shareholders at Chicago-based Wrigley would receive $80 in cash for each share Wrigley share, the Associated Press reported. The stock price soared $16.05, or 25.6 percent, to $78.50 in premarket trading today.
The buyout will be completed over the course of the next year when Wrigley will become a subsidiary of 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 released 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."
Berkshire Hathaway Inc., owned by Warren Buffett, will purchase $2.1 billion minority equity interest in the Wrigley subsidiary once the deal is completed, reported the AP. Buffet 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," Buffett told CNBC today.