Sweet Life

In the high-price world of finance it is not often that market Titans often come together and we all smile; enter the Candy Man AKA Warren Buffet. Through the sweet financial matchmaking of Berkshire Hathaway, chocolate king Mars (a family owned business) is set to acquire the Govenor of Gun Wrigley. What makes Wrigles such a tasty target, simple: margins. Wrigley gets 47% of its profit form overseas, and controls allmost 20% of the gum market share internationally.

People familiar with the matter tell The Wall Street Journal Mars is set to pay more than $22 billion for Wrigley and could announce the transaction as early as today. Such a price from the producer of Snickers bars and M&M's for the maker of Juicy Fruit would be a tasty bonus for shareholders of Wrigley, whose stock market value is about $17.3 billion, and the Journal says the buyers were prepared to stomach such a rich premium. Berkshire, in providing financing for Mars, would become a stakeholder in Wrigley. Closely held Mars has long been admired by Mr. Buffett, who, as the Journal points out, "is famous for confidence in the staying power of iconic consumer brands such as Coca-Cola."

The deal "would remake the global confectionery landscape," offering Mars a more global reach since "Wrigley generates the majority of its sales outside of the U.S," the Journal adds. Mars, with a 15% global market share, is already the biggest seller of chocolate. Among the other candidates for consolidation that may now feel pressured to join forces are Hershey and Cadbury Schweppes, which discussed a deal last year but didn't find a way to make it work, the Journal notes.

Expect stock for both to rise behind this announcement.