Mars has agreed to buy confectionery rival Wrigley in a deal worth US$23bn, the companies have announced today (28 April).

The deal has been part-funded by investment fund Berkshire Hathaway, run by billionaire investor Warren Buffett, which has put up $4.4bn.

The transaction will see two of the world’s largest confectioners come together and create a business generating $27bn in annual sales.

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.

Wrigley chairman Bill Wrigley said the $80-a-share deal represented “tremendous value” for the company’s shareholders.

He added that a combination with Mars gave the 117-year-old company an “historic opportunity” to grow the business.

“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,” Wrigley said.

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.”

Buffet said he had been “a big fan” of Wrigley and said the enlarged business 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.