Chewing gum maker
completed the purchase of some of the confectionery assets of
for $1.46 billion, gaining ownership of a number of brands including Altoids, Life Savers and Creme Savers.
The purchase price will be partly offset by about $300 million in cash tax benefits associated with the amortization of intangible assets. Wrigley said the transaction, including one-time costs, will slightly lower earnings in 2005 and add a little to profits next year.
The company will cease the operations at a newly acquired Kraft facility in Bridgend, Wales, and at two existing Wrigley plants, one in Chicago and one in Edison, N.J. Wrigley also plans to sell the North American marketing rights and the Iowa production facility for the Trolli brand that are included in the acquisition.
At the same time, Wrigley expects to increase the investment and business activity at the company's manufacturing facilities in Gainesville, Ga., and Yorkville, Ill., as well as at a newly acquired plant in Chattanooga, Tenn.
In all, the company believes about 500 jobs will be cut, or around 3% of Wrigley's global workforce. The company will record severance and other cash closing costs of $15 million. Wrigley said it will offer some employees the chance to transfer to other locations and others an early retirement program.
The moves will result in $60 million of after-tax charges, including $25 million in noncash charges.
Wrigley has issued $1.35 billion of commercial paper to complete the deal, with the rest of the purchase price funded with cash. In the next few weeks, the company will issue $1 billion of debt to replace most of the commercial paper.
Shares of Wrigley were down 49 cents to $69.11.