Mars has announced that it will acquire Berkshire Hathaway’s remaining 19% share in confectionery company Wrigley to set up a merger between the two firms.
The deal will allow Mars to take full control of Wrigley, having owned a majority stake in the gum maker since an initial acquisition in 2008. The integration of the two companies is expected to be phased in gradually during 2017, with the newly formed combined division – Mars Wrigley Confectionery – headquartered in Chicago.
The business unit will include some of the two group’s most well-known brands – including chocolate brands like Snickers, M&Ms, Galaxy and Maltesers; gum and mint brands such as Doublemint and Orbit; and fruit confections such as Skittles and Starburst.
It will be headed by Martin Radvan, current global president of Wrigley and a 30-year veteran of Mars.
Based on sales, privately owned Mars is already the US’ largest confectionery maker. The company said that the acquisition would help it to serve its customers better, address consumer trends and accelerate growth opportunities in a vibrant global confectionery category.
Mars president and CEO Grant F Reid said: “We are grateful for the strong and productive partnership we have with Warren Buffett and Berkshire Hathaway. It is a great relationship that has yielded value on both sides. We’re equally pleased that sole ownership of Wrigley provides us with an opportunity to rethink how we simplify our chocolate and Wrigley businesses so that we can bring a more holistic approach to this vibrant category.”
Analysts have been anticipating the deal for a while, given their increasing cooperation in recent years.
David Sprinkle, research director for market research firm Packaged Facts, believed that completing the partnership would offer both Wrigley and Mars significant benefits.
Sprinkle said: “The candy market terrain shows a broad array of players that have a significant presence in the US market, but is led by candy behemoths such as Mars and Hershey, which dominate the domestic market.
“But as in many markets today, there is an influential group of disruptors, especially the super-premium gourmet candy producers and the craft producers. Regardless of whether the newly announced unified company tackles such niche candy segments remains to be seen, but at the very least this is a fortification of Mars’ already formidable assets as the company looks ahead to future growth opportunities.”
© FoodBev Media Ltd 2021
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