It's a candy deal, but not a cookie-cutter transaction by any means. And since Mars Inc.'s
$23 billion deal to buy chewing gum maker Wm. Wrigley Jr. Co. happened with a major assist from Berkshire Hathaway Inc., Warren Buffett has yet another object lesson in applying creative solutions to basic businesses that he can share with Berkshire shareholders on May 3. Tens of thousands of them will soon be packing for their annual pilgrimage to Omaha, and a strong whiff of Juicy Fruit is expected to emanate from the crowd at Qwest Center.
This is a cash deal at a hefty premium to market, with Berkshire lending subdebt and also taking an equity stake in Wrigley. It's billed as a merger, not an acquisition. Far from being absorbed into much bigger Mars, Wrigley will continue as a standalone unit. Indeed, as the
Chicago Tribune reports, Mars will concentrate on its chocolates and fork over its Skittles and Starburst brands to Wrigley. In a release, Mars global president Paul Michaels assured Chicago-based employees he understands how important the Wrigley brand is to the community and plans to maintain operations there.
At a press conference Monday morning, Wrigley chairman Bill Wrigley said he was reassured by Mars' hands-off management of Royal Canin, a pet food company that has flourished since Mars bought it. Sounds a lot like Buffett's own approach to acquisitions -- a comparison that might even come up on Saturday at what Buffett has dubbed "Woodstock for Capitalists." -
Baz HiralalMore on the Berkshire meeting from the APSee Buffett's most recent letter to Berkshire shareholdersGo to the Wrigley/Mars-Berkshire story from TheDeal.comGo to the Wrigley/Mars-Berkshire story from the Chicago Tribune
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Juergen Lasowski
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