Candy maker Mars on Monday said it was acquiring gum maker
William Wrigley Jr. Co.
( WWY) for $23 billion in cash, aided by financing and an investment from Warren Buffett's
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,
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
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"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
also were rising Monday morning.
This article was written by a staff member of TheStreet.com.