The Wrigley Company Agrees to Merger with Mars, Inc.

The Wm. Wrigley Jr. Company (NYSE: WWY) today announced that it had reached an agreement to merge with Mars, Incorporated, one of the world s leading confectionery and consumer goods companies. As a result of this transaction, Wrigley will become a private company and part of one of the world s premier family-owned companies. The combined organization will have a product portfolio containing some of the world s most recognizable and well-loved confectionery brands -- including Orbit(R), Extra(R), Doublemint(R), M&M s(R), Snickers(R) and Mars(R) -- as well as leading food, beverage and pet care brands, totaling over $27 billion in global sales.
Mars, Incorporated has agreed to pay $80 cash for each share of Common Stock and Class B Common Stock of the Wrigley Company in a transaction valued at approximately $23 billion. The terms of the transaction have been unanimously approved by the Wrigley Board of Directors. Based on Wrigley s closing share price of $62.45 on April 25, 2008, and its three-month weighted average share price of $59.88, this price represents a premium of 28 percent and 34 percent, respectively, to the Company s stockholders. This price also represents 4.3 times Wrigley s 2007 net sales and over 35 times Wrigley s 2007 earnings per share.


Mars, Incorporated, will acquire 100 percent of Wrigley s outstanding shares and all of its outstanding options will be cashed out. The Wrigley Company will operate as a separate, stand-alone subsidiary, keeping its headquarters in Chicago and continuing its civic and philanthropic involvement, both locally and in its communities around the world. Additionally, Bill Wrigley, Jr. will continue serving as the Company s Executive Chairman. As part of the transaction, Mars non-chocolate sugar brands -- including Starburst(R) and Skittles(R) -- will be added to Wrigley s confectionery portfolio, joining such well-known brands as Lifesavers(R) and Altoids(R).
"First and foremost, this is a great transaction at a great price that provides tremendous value to Wrigley stockholders," noted Bill Wrigley, Jr., Executive Chairman and Chairman of the Board. "Additionally, in terms of Wrigley s ongoing business, the true value of this transaction arises primarily from enhanced growth opportunities, including the potential for cross-pollination of people, ideas and brands, and significant enhancements of sales, marketing and distribution infrastructures. We see this as an historic opportunity to preserve what is special about the Wrigley Company in terms of values and culture, while continuing to grow and develop our associates, invest in our brands and drive long-term generational growth. So, from every perspective, I strongly support the transaction."
"Mars and Wrigley have much more in common than multi-generational family leadership and significant global footprints," commented Paul S. Michaels, Mars Global president. "We share common values and ways of doing business, including an emphasis on ethics and respect for people, focus on generational growth, and expertise in obtaining consumer insights and building enduring brands. This is not about being bigger -- it s about being the best, and providing leadership and innovation across the full range of confectionery categories."
The merger unites two outstanding confectionery traditions. With the Wrigley Company being founded in 1891 and Mars, Incorporated being established in 1911, the combined enterprise will have over two centuries of experience in producing outstanding confectionery products, delighting consumers, and building great brands and strong businesses around the world.
"This combination brings together two strong, complementary confectionery organizations," noted Bill Perez, President and Chief Executive Officer. "A big part of what attracted Mars to Wrigley was our proven track record in the marketplace and the talent of our people. As a stand-alone subsidiary of Mars, with our strong, global leadership team in place, we will have the opportunity to accelerate our already strong growth trajectory."
Funding for the transaction includes approximately $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, Inc. At closing, Berkshire Hathaway has committed to purchase a minority equity interest for $2.1 billion in the Wrigley Company subsidiary at a discount to the share price being paid to the stockholders of Wrigley.
"Those of you who know me, know that I have been a big fan of Wrigley s business model for many years, and I love their products," said Warren E. Buffett, Chairman and Chief Executive Officer of Berkshire Hathaway. "When you think of a business that s easy to understand, with favorable long-term economics, and able and trustworthy management -- you think of Wrigley. Bringing together these iconic, world-class companies combines Wrigley s strengths with the deep resources and proven brand-building savvy of Mars and will result in a powerful force for innovation and growth in the global confectionery marketplace."
The proposed transaction is subject to customary closing conditions, including stockholder approval and certain governmental regulatory clearances. Both parties are committed to working to close the transaction as soon as possible, with the merger expected to be completed within six to twelve months.
For this transaction, Goldman, Sachs acted as the Wrigley Company s financial advisor and also as placement agent for the securities to Berkshire Hathaway; William Blair Incorporated acted as a financial advisor and provided an independent fairness opinion; and Skadden, Arps, Slate, Meagher & Flom, LLP served as legal advisor.