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Merger forms world's biggest confectionary co -

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ELEANOR HALL: Now to a business deal that would make Willy Wonka blush.

The makers of Mars Bars and M and Ms have teamed up with the billionaire investor, Warren Buffett,
to gobble up the world's biggest chewing gum manufacturer, Wrigleys. The deal is valued at more
than $24-billion.

And together these sweetmakers will become the world's biggest confectionery company, as Ashley
Hall reports.

ASHLEY HALL: It's a marriage of two family-run companies with long and proud traditions in the
confectionery game. The chairman of the gum-maker, Bill Wrigley Junior, says it was an emotional
decision to sell a company that's been in his family for four generations.

A decision made easier perhaps by the $85 a share he was offered, nearly a 30 per cent premium over
Wrigley's closing share price on Friday.

BILL WRIGLEY JUNIOR: Certainly, this is an historic and groundbreaking move and we are confident
that the agreement represents a win-win-win for our stockholders, the company and our associates.

ASHLEY HALL: The two companies and families are certainly no strangers. Family legend has it that
the patriarchs of the Wrigley and Mars dynasties attended baseball games together in the 1930s.

(Excerpt of PK chewing gum advertisement)

ASHLEY HALL: PK chewing gum is just one of a long list of brands sold by the Wrigley Company in
more than 180 countries. Set up in Chicago by William Wrigley in 1891, the company started out
selling soap and baking soda.

A year later, he added chewing gum to the packets as a sales gimmick. The gum proved so popular, it
wasn't long before it became Wrigley's main business.

And the family name has become synonymous with Chicago. Tourists take photos of the company's
towering headquarters, and the local ballpark, Wrigley Field, got its name when the family owned
the Chicago Cubs baseball team.

(Excerpt of Mars advertisement)

ASHLEY HALL: Now, Wrigley will become a subsidiary of the biggest family owned company in the US,
Mars Confectionery, which has itself been trading since 1911. Wrigley will continue to focus on
gum, Mars will stick to chocolate. And both businesses should benefit.

The other person hoping to benefit is the billionaire, Warren Buffett. He'll provide debt financing
to the deal and his investment company Berkshire Hathaway will end up with more than 10 per cent of
Wrigley.

Neither company will talk about what the deal means for the Australian businesses.

The analyst Toon Van Beeck of IBISWorld says the two companies will command about 18 per cent of
the local market.

TOON VAN BEECK: Cadbury-Schweppes is the largest player within the confectionary manufacturing
industry holding a massive 45 per cent market share so this merger brings Mars somewhat closer to
Cadbury but is dwarfed by their size.

ASHLEY HALL: And he says Australian consumers are unlikely to notice any difference in the price or
quality of the products.

TOON VAN BEECK: There is not going to be any real change to the Australian consumer. Prices are
expected to remain the same and prices are not likely to change as a result of this merger.

Any price changes are likely to be due to the fact of increasing goods prices such as milk and
sugar. It is also even likely that packaging will remain the same. Mars wouldn't be spending
$25-billion to throw out such a prominent brand and valuable brand such as Wrigleys.

ASHLEY HALL: The deal still needs to get approval from the US Government.

Analysts say that should be forthcoming because the new massive company's products are diverse
enough to quieten any concerns about monopoly power.

ELEANOR HALL: Ashley Hall reporting.