Mars to acquire Wrigley for $23 billion
April 28, 2008
by Keith Nunes
MCLEAN, VA. — Mars Inc. has entered into an all-cash merger agreement with the Wm. Wrigley Jr. Co., Chicago, in a transaction valued at approximately $23 billion. Wrigley will become a stand-alone subsidiary of Mars under the terms of the agreement.
Shareholders of Wrigley will receive $80 in cash for each share of common stock and class B common stock, and the transaction has been approved by the boards of directors of both companies. On April 25, Wrigley’s share price closed at $62.45.
Funding for the purchase includes $11 billion from Mars, a $5.7 billion senior debt facility from The Goldman Sachs Group, Inc., and debt financing from Berkshire Hathaway Inc., Omaha. Berkshire Hathaway will purchase a minority interest in the Wrigley subsidiary for $2.1 billion at the closing of the transaction.
"First and foremost, this is a great transaction at a great price that provides tremendous value to Wrigley stockholders," said Bill Wrigley Jr., executive chairman and chairman of the board of Wrigley. "Additionally, in terms of Wrigley’s ongoing business, the true value of this transaction arises primarily from enhanced growth opportunities, including the potential for cross-pollination of people, ideas and brands, and significant enhancement of sales, marketing and distribution infrastructures."
Once the transaction is completed, Mars will transfer its Starburst and Skittles brands to Wrigley. Mr. Wrigley will remain executive chairman of Wrigley and report to Paul S. Michaels, global president of Mars.
"The strong cultural heritage of two legendary American companies with a shared commitment to innovations, quality and best-in-class global brands provides a great basis for this combination," Mr. Michaels said. "We are looking forward to continuing on our path of growth by jointly developing those values even further."
The proposed merger is subject to federal regulatory approval and stockholder approval.