Sweet deal: Warren Buffett, Mars in bid for Wrigley gum

The candy industry got a major shakeup on Monday as Mars Inc., with the backing of Warren Buffett and Goldman Sachs, launched a friendly, $23-billion US bid for the Wm. Wrigley Jr. Company.

The takeover would add Wrigley's products — which include Juicy Fruit, Life Savers, Hubba Bubba and Altoids — to the brands of Mars, such as M&M's, Snickers, Skittles and Starburst.

The bid by Mars is for $80 US per share in cash for all the stock of Wrigley.

Investors reacted by sending shares of Wrigley up more than 23 per cent to $76.91 US on the New York Stock Exchange.

Founded in 1911, Mars has about $22 billion US in global sale.  Wrigley's worldwide sales are about $5.4 billion US.

Billionaire investor Buffet's company, Berkshire Hathaway, would provide about $4.4 billion US of debt financing. Berkshire would also buy a $2.1-billion US minority stake in Wrigley once the takeover is completed.

Goldman, Sachs is providing $5.7 billion US in debt financing.

"First and foremost, this is a great transaction at a great price that provides tremendous value to Wrigley stockholders," noted Bill Wrigley, Jr., the executive chairman of the Chicago-based gum company.

"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," he said in a statement.

Family-owned Mars, which is based in McLean, Va., expects to have the takeover completed in six to 12 months. Wrigley will become a subsidiary of Mars.