Buffett to help finance Mars/Wrigley deal
Tuesday, April 29, 2008 : PermalinkWest Palm Bdeach (HedgeCo.Net) - The world’s largest chocolate seller Mars Inc. is finalizing a deal to purchase gum giant Wrigley Jr. Co., for a price tag of about $23 billion.
Warren Buffett will provide $4.4 billion of subordinated debt to fund the deal through his company, Berkshire Hathaway Inc. Buffet’s company will also purchase $2.1 billion in minority equity once the buyout is complete.
"A good time to buy a really great business is when you can do it," Warren Buffett said in an interview on CNBC Monday. The billionaire, who made his fortune from strategic investments, already has a stake in Sees Candies and Dairy Queen.
Wrigley shareholders were told they would receive $80 per share, a sizable increase over its closing price of $62.45 on Friday.
"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."
Wrigley manufactures Juicy Fruit, Big Red and Doublemint gum, along with other popular candies like Life Savers. Mars Inc. makes M&M’s, the Mars bar, Snickers, and other popular candy bars. Their yearly sales alone exceed $22 billion.
Julie Scuderi
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Email: julie@hedgeco.net
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