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UPDATE 1-Mars, Berkshire near pact to buy Wrigley - reports

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Reuters U.S. Company News
03:45 a.m. 04/28/2008


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NEW YORK, April 28 (Reuters) - M&M's maker Mars Inc and Berkshire Hathaway Inc (BRKA) are near a deal to buy Wm Wrigley Jr Co (WWY), the largest U.S. chewing gum maker, for more than $22 billion, according to media reports on Monday.

The deal could be announced as early as Monday, reports in the New York Times and Wall Street Journal said, citing sources close to the matter.

Under one possible scenario, billionaire investor Warren Buffett's Berkshire would likely provide financing to Mars and take a stake in Wrigley, the Journal wrote, quoting people close to the deal.

While the offer is for more than $22 billion, Wrigley has a market capitalization of roughly $17.1 billion, according to Reuters Estimates.

Wrigley has brands such as Altoids, Extra and Eclipse, while its potential owner, privately held Mars, is known for its M&M's, Snickers, Starburst and Twix.

Mars, Berkshire and Wrigley representatives were not immediately available for comment.

The possible union of Mars and Wrigley could mean a renewed push toward consolidation in the global candy business.

One potential deal that could invite fresh interest, is one between London-based Cadbury Schweppes, known for its Dairy Milk chocolate and Trident gum, and top U.S. chocolate maker Hershey Co (HSY) .

A deal between Cadbury and Hershey could make strategic sense for both companies -- while Cadbury, the world's biggest confectionery group, seeks presence in the U.S. chocolate market and can capitalize on Hershey's strength, a deal with Cadbury could aid Hershey in its endeavors to expand overseas.

But some analysts have pointed to Hershey's trust as being a potential obstacle to any such deal. The trust pushed Hershey to put itself up for sale in 2002, but pulled back in the face of pressure from community groups and elected officials.

Back then, Wrigley had made a $12.5 billion bid for Hershey, in an effort to combine its No. 1 position in U.S. gum with Hershey's top spot in U.S. chocolate and candy, but talks fell apart in final stages.

Another bid for Hershey came from Nestle <NESN.VX> and Cadbury together, but was rejected as too low. (Reporting by Aarthi Sivaraman; Editing by Quentin Bryar)