CHICAGO — William Wrigley Jr.’s family spent more than 115 years building the soap salesman’s fledgling company into a massive corporation that made chewing gum a mass-market product.
But Monday, the Wrigley clan announced it’s finally cashing out after four generations as the iconic confectioner becomes of a subsidiary of privately held Mars Inc. in a $23 billion deal.
“It’s the end of … equity ownership, but I think the legacy of the Wrigley family will survive and endure for some time to come,” said Bill Wrigley Jr., the company’s executive chairman and the great-great-grandson of William Wrigley Jr. “We must respect the past but at all times do what’s right for the future.”
Billionaire Warren Buffett is committing $6.5 billion to help finance the deal. In addition to buying $4.4 billion of Mars’ subordinated debt, Buffett’s Berkshire Hathaway will pay $2.1 billion for an interest in Wrigley at an unspecified discount to the price being paid to shareholders.
“Buffett’s courted that business many times — he uses it to demonstrate what he means by dominant brands — but it has never been cheap enough for him to buy,” said Guy Spier, principal at hedge fund Aquamarine Funds LLC, which owns Berkshire shares. “He’s saying, ‘Great, I’ll finance it, you’ve got to reward me for it.’ ”
Under the agreement, Wrigley shareholders will receive $80 in cash for each share. McLean, Va.-based Mars will also assume a small amount of Wrigley debt.
Executives said family-owned Mars, which makes Snickers and M&Ms, first approached the world’s largest gum maker with an unsolicited bid April 11. The $80-per-share offer is a 28 percent premium over Wrigley’s Friday closing price of $62.45.
The agreement weds two of the country’s most venerable confections companies, which each have long histories of family involvement and long ties to each other.
