Mars buys gum maker in $23b deal

Wrigleys cash out after 115 years

Under the proposal, Wrigley will become a subsidiary of M&M's maker Mars. Investor Warren Buffett will help finance the deal. (Daniel Acker/Bloomberg News)

CHICAGO - William Wrigley Jr.'s family spent more than 115 years building the soap salesman's fledging company into a massive corporation that made chewing gum a mass-market product.

But yesterday, the Wrigley clan said it's finally cashing out after four generations as the iconic confectioner becomes a subsidiary of privately held Mars Inc. in a $23 billion deal.

"It's the end of . . . equity ownership, but I think the legacy of the Wrigley family will survive and endure for some time to come," said Bill Wrigley Jr., the company's executive chairman and the great-great-grandson of William Wrigley Jr.

"We must respect the past, but at all times do what's right for the future."

Yesterday's announcement sent Wrigley's shares into overdrive, jumping $14.46 to $76.91, a record high.

Under the agreement, Wrigley shareholders will receive $80 in cash for each share. McLean, Va.-based Mars will also assume a small amount of Wrigley debt.

Executives said family-owned Mars, which makes Snickers and M&Ms, first approached the world's largest gum maker with its unsolicited bid on April 11. Since then, the two sides have haggled to reach the $80-per-share offer - a 28 percent premium to Wrigley's Friday closing price of $62.45.

The agreement weds two of the country's most venerable confections companies, which each have long histories of family involvement and long ties to each other. Mars, founded in 1911, is still owned by descendants of founder Frank Mars.

Family legend has it that the Wrigley and Mars patriarchs used to attend baseball games together in the 1930s.

"It's been 100 years of due diligence and we saw the opportunity," said Mars president Paul S. Michaels.

The deal includes debt financing from Warren Buffett's Berkshire Hathaway Inc., which will also purchase a $2.1 billion minority equity interest in the Wrigley subsidiary once the deal is done.

If the buyout receives regulatory and shareholder approval, the combined companies would leapfrog over Britain's Cadbury Schweppes as the world's largest confection maker - a move that's already fueling speculation the deal could spawn a round of candy industry consolidation.

The companies expect the buyout to close in six to 12 months.

Wrigley, which has been publicly traded for 80 years, will keep its headquarters in Chicago, a city with whom its name has been synonymous for decades.