Mars to buy out Warren Buffett's minority stake in Wrigley
07 October 2016
US confectionery giant Mars Inc yesterday said that it is buying out Warren Buffett's investment arm Berkshire Hathaway's minority stake in its Wrigley chewing gum business for an undisclosed sum.
In 2008, privately-held Mars, the maker of M&M chewing gum and Sticker bars, and billionaire investor Warren Buffett had acquired US chewing gum maker Wm Wrigly Jr Company in a $22 billion deal. (See: Warren Buffet, Mars acquire Wrigley for $22 billion)
The deal was funded through $11 billion from Mars, a $5.7-billion committed senior debt facility from Goldman, Sachs, and $4.4 billion of subordinated debt from Berkshire Hathaway.
Mars has since repaid Berkshire Hathaway's $4.4 billion.
Berkshire Hathaway had also acquired a minority 19.4 per cent stake for $2.1 billion in the Wrigley Company.
Mars now plans to merge Mars Chocolate and Wrigley to create Mars Wrigley Confectionery and its headquarters will be in Chicago, Illinois.
Martin Radvan, current global president of Wrigley and a 30-year veteran of Mars, will lead the new Mars Wrigley Confectionery.
''Mars Wrigley Confectionery brings together two great businesses, strengthening our ability to create win-win relationships with our customers, and improving our opportunities to address dynamic retail and consumer trends together,'' Radvan said.
''Since Mars acquired Wrigley in 2008, Berkshire Hathaway has held a minority stake in Wrigley that was subject to purchase by Mars over time. Keeping our Freedom Principle in mind, we accelerated the purchase of Berkshire Hathaway's entire equity interest in Wrigley, the Virginia-based company said in a statement.
''We are grateful for the strong and productive partnership we have with Warren Buffett and Berkshire Hathaway. It is a great relationship that has yielded value on both sides. We're equally pleased that sole ownership of Wrigley provides us with an opportunity to rethink how we simplify our Chocolate and Wrigley businesses so that we can bring a more holistic approach to this vibrant category,'' said, Grant Reid, president and CEO of Mars.