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Buffett, Mars Near $22 Billion Deal for Wrigley

Andrew Ross Sorkin|The New York Times
Monday, 28 Apr 2008 | 4:58 AM ET

Mars, the makers of M&M’s, was near a deal last night to acquire the Wm. Wrigley Jr. Company, the chewing gum concern, for more than $22 billion, people involved in the talks said. The transaction would create a confectionery behemoth and could pressure rivals into a cascade of other mergers.

The Mars-Wm. Wrigley Jr. deal has an unusually famous financier: Warren Buffett. Mr. Buffett’s Berkshire Hathaway

is helping finance the transaction for Mars, these people said. Mr. Buffett has a long history with iconic food and beverage businesses. He was an early investor in Coca-Cola and is already a candy owner in Sees Candies.

The deal is expected to be announced as early as Monday, these people said, though they cautioned that the transaction could still be postponed or collapse entirely.

The merger could spark a wave of further consolidation: Hershey and Cadbury Schweppes have held talks for years, but have been unwilling to consummate a deal. They may feel pressure given the scale and scope of a Mars-Wm. Wrigley Jr. combination, which would bring together a big stable of brands with worldwide distribution.

The sale price represents an enormous premium over Wrigley’s market value, which was $17.3 billion Friday. Spokesmen for Mars, Wrigley and Berkshire Hathaway could not be reached.

Among Wrigley’s brands are Extra, Orbit and Eclipse gums as well as LifeSavers and Altoids. Mars has M&M’s, Snickers, Starburst, Skittles and Twix. Mars also makes Uncle Ben’s rice products and pet food under the Pedigree brand.

Mars is a tightly controlled, privately held firm, one of the last in the confectionery business and one of the largest family controlled firms in the nation. It is controlled by the Mars family of northern Virginia. Forrest Mars Sr. created the recipe, and the first M&M’s were sold in 1941.

Wrigley, similarly has a storied history, though it went public in 1923. The Wrigley family, originally of Philadelphia, became a major presence in Chicago, where the company has its headquarters. The family’s name famously adorns the Chicago Cubs baseball stadium.

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