Wrigley chairman Bill Wrigley has said that the rest of the global confectionery industry will be mulling their next moves following the agreement to sell the US gum giant to rival Mars.
Mr. Wrigley was speaking after the two US confectioners unveiled their US$23bn deal earlier today (28 April).
Mars has agreed to buy Wrigley in a deal part-funded by investment fund Berkshire Hathaway , which is run by billionaire investor Warren Buffett and has put up $4.4bn of financing.
Mr. Wrigley said it was “likely” that there would be more consolidation in the “confectionery space”. He said: “The folks at Hershey, Cadbury and Nestlé will be thinking about what they want to do in this space and evaluate other opportunities.”
The Wrigley chairman brushed off the suggestion that the company had agreed to the deal because of growing competitive pressure in the sector.
“That wasn’t a factor at all. We have been pleased with progress and our growth. This [deal] is more about being able to invest in the long-term growth of the business,” he said.
Under the agreement, Wrigley will remain a stand-alone business headquartered in Chicago and Mars will transfer its non-chocolate sugar brands, including Starburst and Skittles, to the gum giant’s portfolio.
Mars Global president Paul Michaels added: “This is not about being bigger – it’s about being the best, and providing leadership and innovation across the full range of confectionery categories.”
Buffett, who will acquire a minority stake in the Wrigley subsidiary, said he had been “a big fan” of Wrigley.
The enlarged business, Buffett added, would be “a powerful force for innovation and growth in the global confectionery marketplace”.
The deal is expected to close within the next six to 12 months.