Wrigley to Add Life Savers
and Altoids
to Its Confectionery Portfolio
CHICAGO, Nov. 15,
2004 --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 |
