Buffett joins with Mars to buy gum maker Wrigley

Candy maker Mars Inc. is teaming with Warren Buffett to buy chewing gum manufacturer Wm. Wrigley Jr. Co. for $23 billion.

The deal, announced Monday, will give Buffett’s Berkshire Hathaway Inc. a stake of more than 10% in Wrigley. Wrigley will become a subsidiary of closely held Mars, which is based in McLean, Va. Buffett’s other food holdings include a stake in Kraft Foods Inc.

The deal, which would create the world’s largest confectionery company, could force Mars rival Hershey Co. and Britain’s Cadbury Schweppes into a deal of their own as they will be faced by a competitor with a stronger geographic base and portfolio of products, analysts said.

Cadbury and Hershey are reported to have held talks in the past.

At $80 a share, the deal represents a 28% premium over Wrigley’s closing stock price of $62.45 on Friday. Shares of Wrigley jumped $14.46 on Monday to $76.91.

Although Wrigley was not seeking a buyer, the price was probably too high to ignore, Edward Jones analyst Matt Arnold said. “I have a hard time explaining it any other way, really. There was no outstanding reason for them to sell it today except for the price.”

The combined companies would have a major presence in the global chocolate, gum and candy businesses.