Historic Combination Values Wrigley at $80 Per Share
CHICAGO, April 28 /PRNewswire-FirstCall/ -- 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®, Extra®, Doublemint®, M&M's®, Snickers® and Mars® -- 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® and Skittles® -- will be added to Wrigley's
confectionery portfolio, joining such well-known brands as Lifesavers® and
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
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
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
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.
SPECIAL NOTE: As a result of this significant event, Bill Wrigley, Jr.
sent the following e-mail to all Wrigley associates worldwide:
From the Office of Bill Wrigley, Jr.
TO: All Wrigley Associates
FROM: Bill Wrigley, Jr.
DATE: April 28, 2008
SUBJECT: Important Announcement Regarding Our Future
Dear Wrigley Associates,
Today, the Wrigley Company is making a momentous and exciting announcement
about our future as a global confectionery company. We have signed an
agreement to merge with Mars, Incorporated, a global, $22 billion private
family-owned company. If approved, the Wrigley Company will become a
separate, stand-alone subsidiary of Mars, with me serving as Executive
Chairman of the Wrigley Company, our current leadership team in place, and an
understanding that we will manage our company as a stand-alone entity. We will
continue to do what we do best, while having access to taking full advantage
of the worldwide talent, innovation, and experiences of Mars, Incorporated.
Obviously, this is an historic decision, and one that, no doubt, will come
as a great surprise to all of you. Frankly, it's not something that even I
had envisioned, until this extremely compelling opportunity was presented to
The Mars family approached us with an all-cash offer to merge with their
company. While the Board of Directors did not seek out the Mars offer, we had
a fiduciary responsibility to consider it and, after thorough deliberations,
determined that the opportunity is in the best interest of the Company's
stockholders, many of whom are Wrigley associates. Funding for the purchase
includes cash from Mars and subordinated debt financing from Warren Buffett's
company, Berkshire Hathaway -- which will hold an equity interest in the
Wrigley Company subsidiary. Our stockholders will vote on the merger at a
special stockholders' meeting later this year.
The stockholder benefits of this opportunity are clearly apparent. What I
find especially motivating and compelling, however, is what it means for the
future generational growth of our company and our people. This combination
has the potential to bring together two strong, complementary confectionery
organizations, both committed to driving long-term dynamic growth. At the
same time, it frees us from some of the costs -- as well as the constraints
and short-term results pressure -- that come with being a public company.
I want you to know that I strongly support this decision, and I will
remain fully involved in the organization and the business going forward as
Executive Chairman of the Wrigley Company. I also want to emphasize that Mars
recognizes that our success has been fueled by the energy, imagination and
hard work of our strong leadership team and remarkably talented associates
around the world. Their intent is for us to run as a separate entity with a
high degree of autonomy -- which they have done successfully with other
mergers. Bill Perez and I, along with Paul S. Michaels, Mars Global
president, fully expect our Executive Leadership Team and the global
leadership of our company to remain in place as active leaders of the
I've spent a considerable amount of time with their leadership team and
Mars family members, and I do take them at their word on this. Mars
understands our business, our values and our culture, as well as our operating
philosophy and the way we invest long-term in our brands and our people, and
they have no intention to change the way we operate or our unique culture. In
fact, our people, our ability to drive growth, iconic brands, geographic
reach, and extensive supply chain and innovation expertise are all things that
attracted them to Wrigley. In addition, we will maintain our headquarters in
Chicago and continue our community involvement, both in the areas of the world
where do business as well as through the Wm. Wrigley Jr. Company Foundation.
Since its founding in 1911, Mars has been a private company, so you might
not be very familiar with the size and breadth of their organization.
Although best known for M&Ms®, and Snickers®, Mars is a major, global
consumer goods company with interests in confectionery and snacks, as well as
other food, beverage, and pet care products including Dove®, Uncle Ben's®,
Pedigree®, Whiskas®, Royal Canin®, and Banfield Pet Hospitals®. Like
us, they invest in their brands and build for the long-term. In fact, a
significant majority of their business comes from a relatively small number of
brands -- which is an important indication of their commitment to building and
sustaining brand strength.
The true value of this combination arises primarily from enhanced
prospects for growth. The merger will generate a new world of opportunities
for our people, in addition to the potential for cross-pollination of ideas
and brands and further enhancements of sales, marketing and distribution
infrastructures. One immediate advantage is that Mars' non-chocolate sugar
brands -- including Starburst® and Skittles® -- will be added to
Wrigley's confectionery portfolio upon consummation of the merger.
The intent is for the Wrigley Company to be a stand-alone entity in order
to avoid distracting the associates of both companies and possibly
diminishing the outstanding business momentum currently in place. Our
objective is to allow our strengths and assets to complement each other,
providing even more opportunity for growth and career development.
Overall, I am confident that there are more opportunities to grow this
business in a private environment than there are as a publicly-held company.
Together, we will be a company with over $27 billion in sales and more than
64,000 associates worldwide. This combined entity will be, among other
things, the world's leading confectionery company, with the resources and
critical mass to explore new geographies and categories that might have been
beyond our reach in the past.
Of course, this represents a significant change for us -- a change that is
emotional for me, as I imagine it will be for you. As we assessed this
opportunity, however, I thought a lot about something you've heard me say many
times. We must respect the past, but, at all times, do what's right for the
future. Every generation of Wrigley leadership has had to make decisions that
are in the best long-term interests of our stockholders and our associates.
We have a long legacy of preserving what makes us special, while always doing
what it takes to be dynamic, competitive, and forward-looking. Being a public
company has given us the financial security to grow with the support of our
stockholders. Today, however, we have an opportunity to grow as a private
company, while preserving our values, our heritage, and the unique culture
that has inspired our success. Rest assured, one thing that will never change
is the way we treat our associates, both in terms of acting with trust,
dignity and respect and in terms of rewarding you appropriately for your hard
work and dedication.
I also want to emphasize that we remain committed to an operating
philosophy of driving generational growth, and that this opportunity will be,
in fact, an enabler of generational growth. I have always believed that
generational growth means the responsibility and the privilege of passing on
to future associates a company that is stronger and better poised for growth
than the one we received. It is about building a legacy of opportunity and
shared success ... and that legacy is much more than the Wrigley family, it
is about all of our associates who have made and will continue to make that
growth possible. This is our chance to create a legacy of opportunity and
long-term future success.
So, we envision this to be a win-win-win for our stockholders, the company
and our people. We have the opportunity to be a privately-held company, add
significant confectionery brands to our portfolio, and combine ideas,
resources and energy with one of the best consumer product companies in the
While the potential of this combination is exciting on many levels, we
need to remember that the merger is contingent on stockholder approval and
various regulatory reviews. Of course, to help the entire Wrigley world
understand the implications and opportunities involved in being part of a
larger organization, we will be reaching out to you in the weeks ahead with
additional updates and town hall meetings about what this means to the Company
and its future, as well as what it means to all of you as individuals.
If there were one thing I could change about this opportunity, it would be
the hurry up and wait nature of this process. I wish the timing and the
pace of the announcement could have been slower, allowing you more time to
analyze, discuss and adjust to this news. But as a still publicly-traded
company, we are legally obligated to disclose this kind of information as
quickly and broadly as possible. That said, I wish the interim period between
now and the close could go faster, eliminating the stretches of time when we
are in a wait-and-see mode and getting us to the point where we can really
drive the combined business as soon as possible. Our intent is to close the
transaction in the next 6-12 months.
Bill Perez, the Executive Leadership Team and I want to emphasize that we
need to continue to do what we do best - winning consumers, servicing
customers, and delivering great products and results. All of our energy needs
to be focused on our aspirations for growth and delivering our 2008 plan - and
we're off to a great start. By maintaining business momentum - at both
companies - we will be in the optimal position to capitalize on the
opportunities that will be available to the combined organization.
Undoubtedly, there will be a risk of distraction during this transition.
Given the tremendous opportunity that lies before us, we must work together to
harness our energy and talent and strengthen our already growing and dynamic
organization. I have total confidence in this team's ability to stay focused,
resilient and committed, because you have proven yourselves time and time
We all need to look to the future with optimism. I am certain that this
merger will bring new opportunities for growth and tremendously exciting
possibilities for all of us. I can't wait to be part of this dynamic future,
and I hope you will feel the same way.
With best regards,
Bill Wrigley, Jr.
ADDITIONAL NOTE: In a separate release, also issued this morning, the
Wrigley Company announced a 17% increase in quarterly earnings per share on
record first quarter sales that were up 16% from a year ago.
The Wm. Wrigley Jr. Company is a recognized leader in confections with a
wide range of product offerings including gum, mints, hard and chewy candies,
lollipops, and chocolate. The Company has global sales of $5.4 billion and
distributes its world-famous brands in more than 180 countries. Three of
these brands -- Wrigley's Spearmint®, Juicy Fruit®, and Altoids® -- have
heritages stretching back more than a century. Other well-loved brands
include Doublemint®, Life Savers®, Big Red®, Boomer®, Pim Pom®,
Winterfresh®, Extra®, Freedent®, Hubba Bubba®, Orbit®, Excel®,
Creme Savers®, Eclipse®, Airwaves®, Solano®, Sugus®, P.K.®, Cool
Air® and 5(TM).
Mars, Incorporated is a family owned company that produces some of the
world's leading confectionery, food and petcare products and has growing
beverage and health & nutrition businesses. Headquartered in McLean,
Virginia, Mars, Incorporated operates in more than 66 countries and employs
more than 48,000 associates worldwide. The company's global sales are $22
billion annually. Founded in 1911, the company manufactures and markets a
variety of products under many of the world's most recognizable trademarks,
including DOVE®, MILKY WAY®, M&M'S®, SNICKERS®, MARS®, UNCLE
BEN'S® Rice, ROYAL CANIN® and PEDIGREE® and WHISKAS® petcare products.
Additional Information and Where to Find It
In connection with the above-described transactions, the Company will file
with the U.S. Securities and Exchange Commission a preliminary proxy statement
and a definitive proxy statement. The proxy statement will be sent to the
Company's stockholders, who are urged to read the proxy statement and other
relevant materials when they become available, because they will contain
important information about the above-described transactions. Wrigley
investors and security holders may obtain free copies of these documents (when
they are available) and other documents filed with the SEC at its web site at
www.sec.gov. In addition, investors and security holders may obtain free
copies of the documents filed with the SEC by the Company by going to the
Company's Investors page on its corporate website at www.wrigley.com or by
directing a request to Wm. Wrigley Jr. Company, 410 North Michigan Avenue,
Chicago, Illinois 60611 -- Attention: Investor Relations.
The Company and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the stockholders of the
Company in connection with the above-described transactions. Information
about the Company and its directors and officers can be found in the Company's
Proxy Statements and Annual Reports on Form 10-K filed with the SEC, as well
as on the Company's Investors page on its corporate website at
http://www.wrigley.com. Additional information regarding the interests of
those persons may be obtained by reading the proxy statement when it becomes
Cautionary Statement Regarding Forward-Looking Information
This press release contains statements which may be considered forward-
looking statements within the meaning of the Securities Exchange Act of 1934,
including, without limitation, statements regarding operating strategies,
future plans and financial results. Forward-looking statements may be
accompanied by words such as anticipate, believe, could, estimate,
expect, forecast, intend, may, possible, predict, project or
similar words, phrases or expressions. The Company does not undertake any
obligation to update the information contained herein, which speaks only as of
the date of this press release. A variety of factors could cause actual
results to differ materially from the anticipated results or expectations
expressed including, without limitation, the occurrence of any event, change
or circumstance that could give rise to the termination of the merger
agreement and the possibility that the Company would be required to pay any
termination fee in connection therewith; the outcome of any legal proceedings
that may be instituted against the Company and others following the
announcement of the merger agreement; risks that the required regulatory
approvals will not be obtained in a timely manner, if at all; inability to
complete the merger due to the failure to obtain stockholder approval or
failure to satisfy the other conditions to the completion of the merger; risks
that the proposed transaction disrupts current plans and operations; the
availability or retention of retail space; the availability of raw materials;
changes in demographics and consumer preferences; changes in foreign currency
and market conditions; increased competition and discounting and other
competitive actions; underutilization of or inadequate manufacturing capacity
and labor stoppages; governmental regulations; and the outcome of integrating
acquired businesses. These factors, and other important factors that could
affect these outcomes are set forth in the Company's most recently filed
Annual Report on Form 10-K and the Company's other SEC filings, in each case
under the heading Forward-Looking Statements and/or Risk Factors. Such
discussions regarding risk factors and forward-looking statements are
incorporated herein by reference.
Christopher Perille, Senior Director - External Relations
Susan Henderson, Vice President - Corporate
Both of Wm. Wrigley Jr. Company