Mars Inc., backed by billionaire investor Warren Buffett’s Berkshire Hathaway Inc., said on Monday that it will buy 117-year-old chewing gum pioneer Wm. Wrigley Jr. for about $23 billion. Mars will pay $80 in cash for each share of Wrigley share, a 28% premium over Wrigley’s Friday closing price of $62.45. The deal will apparently create a global candy giant with annual sales of $28 billion.

 

Wrigley will become a stand-alone, separate Mars subsidiary, in which Buffett’s Berkshire Hathaway will make a minority investment. Specifically, Berkshire Hathaway will make a $2.1 billion equity purchase in Wrigley. It will be bought at a discount to the share price being paid to the company’s shareholders.

 

In addition to Berkshire Hathaway, financing for the transaction is to be provided by Goldman Sachs and JP Morgan. The deal is expected to close in six to 12 months.