by Jessica Sabbath
M&M’s candy manufacturer Mars Inc. will buy Wm. Wrigley Jr. Co. for $23 billion, creating the world’s largest confection maker, both companies announced on Monday.
With financial backing from Warren Buffet’s Berkshire Hathaway, Mars agreed to pay $80 for each share of Wrigley. The deal, subject to regulartory and shareholder approval, will be a premium for Wrigley shareholders. The stock closed at $59.88 on Friday.
McLean-based Mars, the largest chocolate seller in the world, will transfer its nonchocolate candies, which include Skittles and Starburst, to Chicago-based Wrigley. Wrigley will operate as a standalone subsidiary under the deal, lead by Bill Wrigley Jr., Wrigley’s current chairman.
In addition to Berkshire Hathaway, Goldman Sachs and JP Morgan provided funding for the deal.
“Bringing together these iconic, world-class companies combines Wrigley’s strengths with the deep resources and proven brand-building savvy of Mars and will result in a powerful force for innovation and growth in the global confectionery marketplace,” Warren Buffet, chairman and CEO of Berkshire Hathaway, said in a statement.
The merger is expected to take place in six to 12 months.
Mars, whose brands include M&M’s and Snickers, should have an estimated $27 billion in global sales after the proposed merger. Wrigley, whose other brands include Extra, Orbit and Altoids, reported net sales of $5.4 billion last year.
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