Buffett's Berkshire, Mars to Buy Wrigley, WSJ Says

Buffett's Berkshire, Mars to Buy Wrigley, WSJ Says

April 28 (Bloomberg) -- Mars Inc. and Warren Buffett's Berkshire Hathaway Inc. may be close to buying Wm. Wrigley Jr. Co. for more than $22 billion in a deal that would combine two of the biggest U.S. candy makers, the Wall Street Journal reported.

The purchase of the maker of Doublemint gum, which had a market value last week of $17.1 billion, may be announced as early as today, the Wall Street Journal and New York Times reported, citing unidentified people familiar with the matter.

Uniting closely held Mars, the Hackettstown, New Jersey- based maker of Snickers and M&Ms, and the 117-year-old Wrigley would create a company that would compete with chocolate maker Hershey Co. and Cadbury Schweppes Plc, the world's largest candy maker. U.S. candy companies are exploring combinations as competition intensifies and milk and sugar prices rise.

Wrigley's sales may grow 9 percent this year, the slowest pace since 2000, according to the average estimate of nine analysts surveyed by Bloomberg. Competition from London-based Cadbury's Trident and Dentyne gums in the U.S. has eroded its market share.

In 2006, Chicago-based Wrigley named former Nike Inc. Chief Executive Officer William Perez president and CEO, the first person outside the Wrigley family to head the world's biggest chewing-gum maker.

The trust that controls Hershey discussed ways to merge the chocolate company with Cadbury in a way that wouldn't decrease the trust's ownership, the Journal reported last year.

Chocolate Market Share

Since November 2006, Mars's share of the U.S. chocolate market has increased 1.3 percentage points, while Hershey's market share has fallen 2.3 percent points, Alexia Howard, a Sanford C. Bernstein analyst who recommends investors sell Hershey, wrote in an April 11 note to investors.

Voice and e-mailed messages sent by Bloomberg News to Berkshire spokeswoman Jackie Wilson and Mars spokeswoman Alice Nathanson weren't immediately returned, nor was a call to Wrigley spokesman Christopher Perille.

``We do not comment on market speculation,'' Jennifer Wu, corporate affairs director for Wrigley in Asia, said in a phone interview today.

The terms of the purchase weren't immediately clear, the Journal reported. Berkshire Hathaway may have been prepared to provide financing and become a stakeholder in Wrigley, it said.

See's Candies

Berkshire Hathaway also owns See's Candies, an 87-year-old confectioner in San Francisco.

Warren Buffett's Berkshire Hathaway has about $40 billion to spend on acquisitions. The 77-year-old Buffett has built Omaha, Nebraska-based Berkshire over four decades from a failing textile maker into a $195 billion holding company with businesses ranging from candy making to insurance. Berkshire has stakes in companies including Coca-Cola Co. and Buffett ranks as the world's richest person, according to Forbes magazine.

William Wrigley Jr. began selling soap in Chicago in 1891 and eventually turned to chewing gum, an item he was giving away for free with each sale, according to Wrigley's corporate Web site. He introduced Juicy Fruit and Wrigley's Spearmint in 1893, two brands the company still sells today.

Mars, founded in 1911 by Frank C. Mars, is still family owned. The company has about $25 billion in annual sales, 45 percent from chocolates and other snacks. Its biggest division is pet food, which sells Whiskas cat food and Pedigree for dogs, and accounts for 46 percent of sales, according to the company's Web site.

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