Candy maker Mars on Monday said it was acquiring gum maker
William Wrigley Jr. Co.
for $23 billion in cash, aided by financing and an investment from Warren Buffett's
(BRK.A - Get Report)
Mars will pay $80 for each share of Wrigley stock, a more than 28% premium to Wrigley's closing price of $62.45 Friday. The deal is fully underwritten by Berkshire,
(GS - Get Report)
(JPM - Get Report)
and is not subject to financing conditions, the companies said.
Mars will provide $11 billion of funding for the transaction and Goldman will provide a $5.7 billion committed senior debt facility. Berkshire will provide $4.4 billion in subordinated debt and at closing will invest $2.1 billion in Wrigley, which will become a standalone subsidiary of Mars.
Cramer: What Buffett's Wrigley Move Means for Banks
"When you think of a business that's easy to understand, with favorable long-term economics, and able and trustworthy management -- you think of Wrigley," Buffett said in a statement issued by Wrigley. "Bringing together these iconic, world-class companies combines Wrigley's strengths with the deep resources and proven brand-building savvy of Mars and will result in a powerful force for innovation and growth in the global confectionery marketplace."
Wrigley shares soared more than 23% after the opening bell to $77.
Mars, which makes candy brands such as Snickers, M&M's and Dove, will add Wrigley's Doublemint, Spearmint and Juicy Fruit gums and Lifesavers to its product mix.
"The strong cultural heritage of two legendary American companies with a shared commitment to innovation, quality and best-in-class global brands provides a great basis for this combination," Mars Global President Paul Michaels said in a company statement. "We are looking forward to continuing on our path of growth by jointly developing those values even further."
Other candy makers
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(CSG - Get Report)
also were rising Monday morning.