Wrigley shareholders approved the $23 billion sale of the company to Mars Inc., a transaction that the Chicago Tribune says will end the independence of one of Chicago’s most venerable companies.
The deal is expected to close within two weeks, when Wrigley will become part of the privately-held Mars, creating the world’s biggest confection company. Wrigley will remain in Chicago as a subsidiary of Virginia-based Mars, The Chicago Tribune reported.
William Wrigley Jr., the company’s chairman, told shareholders that the benefits of the deal "have become even more striking" given what’s happened in financial markets since late April, when Mars’ offer was unveiled.
William Wrigley Jr., great-grandson of the man who founded the gum giant in the 1890s, said he expects the deal will close around Oct. 6. Wrigley also addressed a shareholder’s concern about the deal’s financing amid turmoil on Wall Street, The Tribune reported.
Goldman Sachs is placing $5.7 billion in debt to fund it, and the big Wall Street investment bank is in the midst of shoring up its own finances with a $5 billion capital injection from Warren Buffet.
"The financing is very much in place and we feel confident we have the right institutions involved to make sure this moves forward," Wrigley said in the Chicago Tribune story.
Wrigley’s has more than $5 billion in annual sales and Mars has $22 billion.
The Mars-Wrigley deal has ignited a wave of speculation in recent months about further consolidation in the confectionary business, The Chicago Tribune reported. The most recent speculation popped up this week in Britain’s Daily Telegraph – it surmised that Nestle is angling to buy a stake in Hershey Co., the big U.S. chocolate candy maker.
Cadbury, another big European-based candy player like Nestle, has also been fingered as a suitor for Hershey. Others have speculated that Cadbury would be a target for Northfield-based Kraft Foods, which has a significant chocolate business in Europe.
In other talks, Hansen Natural Corp., a California-based beverage company, and Atlanta-based Coca-Cola Co. could be working on a distribution deal for Hansen’s Monster line of energy drinks, according to industry reports.
Both Hansen and Coca-Cola have declined to comment on the speculation.
According to the Beverage Digest, Coca-Cola and Hansen have been discussing having the Coca-Cola system handle Monster for at least some parts of the U.S.
Coca-Cola North American and Coca-Cola Enterprises, Coca-Cola’s largest bottler, signed a distribution agreement in 2005 with Rockstar, a Las Vegas-based energy drink company. Coca-Cola owns Full Throttle, another energy drink.
Monster is the top U.S. energy drink in terms of volume. Red Bull is a close second, and Rockstar is a distance third. Combined, Monster and Red Bull account for more than half of the energy drink segment.
A deal with Monster could give Coca-Cola a stronger position in the growing energy drink market.