CHICAGO, Nov. 15 /PRNewswire-FirstCall/ -- The Wm. Wrigley Jr. Company
(NYSE: WWY) announced today that it has entered into an agreement to purchase
certain confectionery assets of Kraft Foods for $1.48 billion. The
transaction includes ownership of well-known, iconic brand franchises -- such
as Life Savers, Creme Savers(R), and Altoids -- as well as a number of high-
quality local or regional brands and production facilities in the United
States and Europe.
A Perfect Match
"There are only a handful of confectionery brands around the world that
have the combination of heritage and vitality that can match up with Wrigley
brands," commented Bill Wrigley, Jr., Chairman, President & CEO. "Altoids and
Life Savers are two such brands. We are extremely pleased to add them to our
fast-growing and dynamic portfolio of leading confections and are committed to
leveraging their equity to create significant value for our business and our
shareholders. With our confectionery focus and expertise, we look for these
brands to flourish under the Wrigley umbrella and anticipate being able to
take full advantage of their marketplace potential."
Peter Hempstead, Senior Vice President - Worldwide Strategy & New
Business, added, "The addition of these high-quality brands will align
perfectly with our key strategic business choices. Specifically, this
acquisition will:
- provide additional diversification in key categories of mints and hard
and chewy candy, expanding the portfolio we offer to our customers and
consumers worldwide;
- strengthen the Company's overall position in the world's largest
confectionery market;
- add scale and brand depth to an already robust innovation pipeline;
and
- increase efficiency across our confectionery supply chain."
Transaction Details
As noted, the purchase price will be $1.48 billion, offset in part by
approximately $300 million in cash tax benefits associated with amortization
of intangible assets. The net acquisition cost of $1.18 billion represents
2.4 times estimated 2004 sales. In order to complete this all cash
transaction, the Wrigley Company has received a commitment for a credit
facility of $1.5 billion that, even when fully utilized, will leave the
Company with a modest debt-to-market capitalization ratio. This transaction,
including one-time costs, is expected to be slightly dilutive to earnings in
the first full year of combined operations and accretive thereafter.
Key brands involved in the transaction, including where and in what format
they are sold, are detailed below:
BRANDS PRIMARY GEOGRAPHIES PRODUCT FORMATS
Life Savers North America Hard and gummi
candies, lollipops
Creme Savers North America Hard and soft candies
Altoids North America Mints, sours, gum
Other (including Sugus(R) North America, Fruit chews, gummi
and Trolli(R)) Portugal, Romania, candies, pastilles,
Spain, Indonesia, mints
Thailand
Noted Ron Waters, Chief Operating Officer, "We see the addition of these
strong brands and confectionery expertise as a great strategic fit that will
complement and enhance the already excellent organic growth of current Wrigley
products. This is the next step in more fully leveraging our robust sales,
marketing and innovation infrastructure to become a broader-based
confectionery company and to weave our brands even deeper into the fabric of
everyday life around the world."
The proposed acquisition is subject to customary closing conditions,
including certain regulatory clearances. The Wrigley Company will make all
appropriate filings with the relevant U.S. and overseas authorities in the
coming weeks; and subject to receiving those clearances, the transaction is
expected to be completed by mid-2005.
The Wrigley Company is a recognized leader in the confectionery field and
the world's largest manufacturer and marketer of gum, with global sales of
over $3 billion. The Company markets its world-famous brands in over 180
countries. Those brands, a couple of which have been around for over 100
years, include Doublemint(R), Wrigley's Spearmint(R), Big Red(R), Juicy
Fruit(R), Winterfresh(R), Extra(R), Freedent(R), Hubba Bubba(R), Orbit(R),
Excel(R), Eclipse(R), Airwaves(R), Alpine(R), Cool Air(R), and P.K. (R)
This release contains statements that are forward-looking. These
statements are made based upon current expectations which are subject to risk
and uncertainty, and a variety of factors could cause actual results to differ
materially from the anticipated results or expectations expressed. To the
extent that statements contained in this press release may be considered
forward-looking statements, the following will be deemed to be the meaningful
cautionary disclosure regarding such statements. Factors which could cause
results to differ materially include, but are not limited to: changes in the
confectionery, gums and mints, and grocery business environment, including
actions of competitors and changes in consumer preferences; changes in
governmental laws and regulations including taxes; market demand for new and
existing products; changes in raw material and other costs; lack of ability to
implement improvements and to reduce costs associated with distribution
operations; pension cost factors, such as actuarial assumptions and employee
retirement decisions; and lack of ability to sell certain assets at targeted
values. Additional important factors that could affect these outcomes are set
forth in Exhibit 99 to the Company's Annual Report on Form 10-K for the year
ended December 31, 2003.
SOURCE Wm. Wrigley Jr. Company
11/15/2004
CONTACT: Christopher Perille, Senior Director - Corporate
Communications, +1-312-645-4077, or Kelly McGrail, Director - Corporate
Communications, +1-312-645-4754, both of Wm. Wrigley Jr. Company
Web site: http://www.wrigley.com
(WWY)
|
