Two of the world's largest family-owned confectionery firms are to merge. Mars Inc has agreed to acquire 100% of the WM Wrigley Company for $23 billion.
In an email to employees, fourth-generation executive chairman Bill Wrigley Jr (pictured) said that the Mars family approached the chewing gum manufacturer with an all-cash offer. He went on to confirm that the Wrigley Company would be a separate, stand-alone subsidiary of Mars, where he would continue to serve as executive chairman. (Click here to read Bill Wrigley's email in full)
The combined organisation will have a product portfolio containing some of the world's most recognisable brands ? including Orbit, Extra, M&M's, Snickers and Mars ? as well as leading food, beverage and pet care brands that total over $27 billion in global sales.
"This is a great transaction at a great price that provides tremendous value to Wrigley stockholders," said Wrigley Jr in a statement. "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 enhancements of sales, marketing and distribution infrastructures."
Funding for the transaction includes $4.4 billion of subordinated debt from Warren Buffett's Berkshire Hathaway investment house, which has committed to purchase a minority equity interest for $2.1 billion in the Wrigley Company subsidiary.
"We see this as a 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," concluded Wrigley. "From every perspective, I strongly support the transaction."
The merger unites two American confectionery dynasties. Founded in 1891, it has been over 110 years since Wrigley introduced its first two products, Juicy Fruit and Wrigley's Spearmint gums. Mars was established in 1911 by Franklin Clarence Mars, the inventor of the Milky Bar.
Pamela Mars Wright, a fourth generation member of the board of directors, will be speaking at Campden's Families in Business conference in Chicago on 25 June 2008. Click here to register and view the full programme.