Buffett's deep pockets sweeten Wrigley deal
By Jessica Hall
PHILADELPHIA (Reuters) - When Mars Inc needed a little extra money to sweeten its $23 billion (11.56 billion pounds) purchase of Wm Wrigley Jr Co WWY.N, it turned to a friend with deep pockets and a sweet tooth.
Mars will purchase Wrigley, armed with a total of $17.2 billion in combined funding from JPMorgan Chase & Co (JPM.N: Quote, Profile, Research) and Goldman Sachs Group Inc (GS.N: Quote, Profile, Research) -- and about $6.5 billion in help from billionaire Warren Buffett.
"There's no question that financial markets are very challenging right now and coming up with the capital basically to make this deal was a challenge," Bill Wrigley Jr said when asked whether Buffett's help was vital to clinching the deal.
Buffett, who said he was a fan of classic candies such as Wrigley's JuicyFruit and Spearmint gums and as well as Mars' Skittles candies, said Mars had approached him about joining the deal.
"We fit very well as a partner with the Mars family," Buffett said in an interview with CNBC television. "They knew the check would clear and wouldn't interfere in any way."
Mars first contacted Wrigley on April 11 in a deal that caught analysts and Wall Street by surprise.
The mega-deal, which came together quickly, comes despite a depressed merger market. Global merger volume dropped 22 percent in the first quarter as tight credit markets made funding difficult and costly to secure, according to research firm Dealogic.
As private equity firms, which had fuelled much of the record deal volume last year, have seen a 65-percent drop in first quarter deal volume, corporations have become bolder in doing deals. Continued...
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