Wrigley and Mars Merger
Wrigley, owner of Big Red, Juicy Fruit, and other big names announced they will be taking part in a $23 billion merger with Mars, owner of Snickers and M&Ms among others. This is one of the biggest mergers since AOL-Time Warner. Wrigley has been profiting well in the past year with sales up 17%. They were first approached by Mars on the 11th of this month, and they have been talking back and forth since. After Mars purchases each of Wrigley's shares for $80/share, the companies expect to make combined earnings of $27 billion annually.
Wrigley plans on taking over Mars' non-chocolate brand names, such as Skittles and Starburst in order to "enhance sales and marketing opportunities."
Other major confectionery companies, like Hershey, are going to have to make big moves in order to compete with such a powerful merger. Mr. Wrigley anticipates more consolidation among the other major companies in the future as well. (i.e. Hershey, Schwepps, etc.)
http://adage.com/article?article_id=126699
posted by shannon mcconnell @ 4:35 PM
6 Comments
6 Comments:
This should be FUN!!!!!! I was in walmart the other day looking for some old fashion juicy fruit gum and to my dismay all I saw was that darn 5 gum. I was very upset which brings me to my reaction to this post...I think the merger is a great idea. For some reason I feel like Wrigley's is loosing it's traditional advertising and their new gum and new packaging makes me feel like I am investing in an etirely different company than the one I have grown to love and trust. Hopefully this merger will produce a balance for consumer like myself who love their classic appeal, with those consumers who are looking for a new and innovative approach.
I think its pretty interesting that the biggest merger since AOL & Warner is between candy companies. I never really thought about how even companies whose products are so much smaller and less expensive can still be some of the biggest because of the quantity they sell each year, and their brand name and image. I know m&m's are distributed all over the world, along with other Mars candies, and Wrigley's gum has been around forever, so its very interesting to see what new candy we can look forward to now that these two "candy giants" are working together, as opposed to competing.
I think that it is interesting that after all these years two well established major candy companies are merging. I can’t help but wonder if this has anything to do with how the economy is doing right now. Considering that many people are not spending their money on frivolous things like candy as much as they use to. I feel that by both companies merging they are probably going to increase their sales. Whatever the reason I think it is a very smart move for both Wrigley's and Mars Candy. Now Hershey is going to have some very stiff competition, I think it should be interesting to see how well Hershey’s candy sales do after this merge. However, even though I do think it may make things more difficult for their major competitors I don’t think that it will defer their competitors customers brand loyalty. Considering that the purchase of candy is subjective according to taste. I also am wondering, what new candies will come from the two companies’ when they merge. Either way I think it will be very interesting for all those candy lovers out there.
This merger kind of surprised me to. It seems that all sorts of businesses are having to combine just to afford to compete and stay alive anymore. You have all these monstrous conglomerate companies it’s a wonder how any of the little guys can survive anymore. Not that you see a whole lot mom and pop developing a candy line but this true through lots of forms of business. I wonder how this will affect media planner from the different countries. I’m sure it will mean a lot of changes for them at least as they have to start choosing single advertising agencies to now represent the two.
I think it is interesting to consider that a huge candy company like Hershey will have to watch its back with this merger. While Mars and Wrigley's are both strong competiters, I think that their merger won't take away from Hershey loyalists. I guess they may be basing their worries on the notion that two heads are better than one, so with two huge companies working together they could possibly create better ideas than one company, but if Hershey can create a really strong connection with their consumers they will be just fine. Hershey should definitly consider targeting brand loyalists and increasing consumer relations for the future.
When I first heard of the merger, there weren't many details attached to it. I'm glad to hear that there will be a differentiation between the chocolate based candies and the fruit or gum ones. It makes a person a little weary thinking/knowing their gum is made by a company that has specialized in chocolate for years. Let's see where the merger takes the candy-gum industry!
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