Candy-maker Mars Inc. (McLean, Va.) has announced a merger agreement with the Wm. Wrigley Jr. Co. (Chicago) worth about $23 billion. Under the terms of the agreement, the $5.4 billion Wrigley operation will become a separate, standalone subsidiary of Mars.
With $5.4 billion in sales, Wrigley is a world leader in gum and confections.
Some of the financing for the deal will be provided by Warren Buffett’s company, Berkshire Hathaway Inc. (Omaha, Neb.), which will make a minority equity investment in the Wrigley subsidiary. Buffett already owns Sees Candies Inc. (South San Francisco, Calif.). Also participating in the financing will be Goldman Sachs and JPMorgan.
The combined company – merging two of the oldest names in U.S. business – will have a strong foundation of established brands in six core growth categories: chocolate, non-chocolate confectionery, gum, food, drinks and pet care. Its brands include M&M’s, Snickers, Dove, Mars, Orbit, Extra, Doublemint, Uncle Ben’s, Pedigree, Whiskas. Royal Canin and Banfield. The transaction diversifies and strengthens the Mars business in the chocolate, non-chocolate confectionery and gum categories. The combination will also allow Wrigley to retain its focus as a standalone business. And Mars will transfer its global non-chocolate confectionery sugar brands, including Starburst and Skittles, to Wrigley.
Following completion of the transaction, Bill Wrigley Jr. will remain executive chairman of the 107-year-old family-run company, reporting to Mars global president Paul Michaels.
“When this transaction is completed, we will be proud to welcome Wrigley's associates to our company,” Michaels said. “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. We are looking forward to continuing on our path of growth by jointly developing those values even further.”
Mars, founded in 1911, is a privately held company. Wrigley, founded in 1897, went public in 1923.