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Privately-held Mars on Monday moved to create the world’s biggest confectionery company as it announced the agreed all-cash acquisition of gum group Wrigley for around $23bn (£11.5bn, €14.7bn).
Mars is offering $80 a share for Wrigley, a 28 per cent premium to the gum maker’s closing share price on Friday of $62.45 and a 34 per cent premium to the three-month weighted average price of $59.88. The deal is pitched at a multiple of 4.3 times 2007 sales and more than 35 times earnings per share.
The merged company would have around 14.4 per cent of the global confectionery market, according to Bernstein Research, annual sales of more than $27bn and more than 64,000 employees worldwide.
Warren Buffett, the legendary investor, is helping to finance the transaction through his Berkshire Hathaway investment company, which is contributing $4.4bn of subordinated debt. Further financing is being provided by Goldman Sachs, which is putting up $5.7bn of senior debt, and JP Morgan Chase.
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