Archive for April, 2008

Mars to acquire Wrigley: Strategic M&A deals definitely not dead

Posted on Tuesday, 29 April 2008. Filed under: Commentary, Mergers |

Mars, with a little help from Warren Buffet, aims to acquire Wrigley (see FT Alphaville, which also refers to another Financial Times article discussing consolidation in the chocolate and candy industry).

This is a sweet deal (pun intended).  It shows once again that strategic deals will be the flavour (again, pun intended) of the M&A market this year.  Microsoft bidding for Yahoo.  Deutsche Bank targeting (again!) Postbank.  Mars and Wrigley.  Not only do these make strategic sense for the bidders and targets, these are large deals, too, thus demonstrating that megadeals aren’t past their sell-by date (again, pun…) in 2008.  Yes, the market is slower than last year, but these strategic deals make more long-term sense than the typical ‘financial’ deal done by the Private Equity and Venture Capital houses that drove valuations and deal volumes for the past four years.  Note as well that all these deals could be self-financed as well (although Mars is getting some help from the master of long-term investing, Warren Buffet).