Mars Inc. will combine its chocolate operations with its Wrigley subsidiary, as it buys the minority stake in the chewing gum unit from Warren Buffett’s Berkshire Hathaway.
Mars said it accelerated its plan to purchase Berkshire’s Wrigley holding but didn’t disclose financial details. A spokesman for Wrigley didn’t immediately reply to a request for comment.
The move to combine its chocolate business with Wrigley will put brands such as Snickers candy bars and Doublemint gum into one operating segment. Other divisions at Mars, such as petcare and beverages, will remain separate.
The two units will form an entity called Mars Wrigley Confectionery and be led by Martin Radvan, current president of Wrigley and a 30-year veteran of Mars.
Wall Street was surprised by the $23 billion deal that privately held Mars, backed by Berkshire, struck to buy then-publicly-traded Wrigley in 2008.
Berkshire contributed about $6.5 billion to the deal, including $2.1 billion for dividend-paying preferred stock in Wrigley and $4.4 billion in bonds. Mars bought back the bonds in 2013, netting Berkshire a pretax investment gain of $680 million.
Mars had become eligible to purchase half of Berkshire’s Wrigley stake on Thursday, and Berkshire said in a recent filing that it had expected those shares to be purchased. Now, however, Mars will instead purchase the full stake held by Berkshire.
The original Wrigley deal was one of several lucrative investments Mr. Buffett struck during the financial crisis, using Berkshire’s cash-rich position to lend money at high interest rates at a time when credit markets were tight.
On Thursday, Mr. Buffett said “I have enjoyed all of Berkshire’s experiences with the Mars family and management and wish them the very best. Both Mars and Berkshire have profited from our investment, and that’s the way it should be.”
Mars chocolate and Wrigley are set to combine sometime next year. Mars Wrigley Confectionery will be based out of Chicago. Mars Inc. is based in McLean, Va.
By Joshua Jamerson
Source: Wall Street Journal
Consumer behaviors and preferences are evolving rapidly. With macro shifts in society, inflation and food supply challenges set to profoundly influence how people consume food and beverages, Givaudan is exploring what the world of dairy alternatives will look like in the coming decade.
After nearly three decades with AFI, Andersen is leaving to pursue a different career path “to work on diverse projects and explore opportunities to serve as board member”. Serving as CEO since 2010, Andersen joined AFI in 1994, initially overseeing applications and R&D. Over the years, he has maintained a strong focus on the whey business.
The Kraft Heinz Company has introduced five new members to its executive leadership team, who will collaborate with Carlos Abrams-Rivera upon assuming the CEO role in 2024. Pedro Navio will assume the position of North America president at the beginning of next year. In addition, Willem Brandt, Bruno Keller, Cory Onell and Diana Frost will join Abrams-Rivera and Navio on the executive leadership team.
