Warren Buffett

Financier invited to join candy deal by Goldman Sachs.

Mars Inc's planned acquisition of Wm. Wrigley Jr. & Co. carries a familiar script for Warren Buffett, who during a previous market rout said he felt like a kid in a candy store. The $23 billion deal will create a company that will reshape the global sweets business and got done because the three strongest financial firms in the US wrote the checks.

Last month, JP Morgan Chief Executive James Dimon encouraged clients to seek financing. "Leveraged finance is still there, give us a call," Mr. Dimon urged. Bankers are willing to lend, albeit to good clients. It isn't just talk. Mr. Dimon himself approved a $11 billion loan package to longtime client Mars to help the candy maker capture Wrigley.

Approval, wasn't accompanied by a lot of hand-wringing; this one took the approval of only about five people and just five days to arrange.

Goldman Sachs banker, Byron Trott, an adviser to Wrigley and a longtime adviser to Mr. Buffett, made the connection.

Wrigley had rebuffed Mars several times because the price wasn't high enough. The financing let the buyers pay a premium - 28% over the current share price, that the sellers accepted.

Buffett is in for $6.5 billion. His company throws off so much cash, that despite investments such as the $4 billion for 80% of Iscar, an industrial group based in Israel, and last year's $4.5 billion purchase of 60% of Marmon Holdings - Berkshire's cash balances has held stubbornly between $43 billion and $45 billion at the end of each of the past three years. Mr. Buffett concedes the problem is, the company prefers to invest $5 billion to $20 billion in its deals.

Berkshire Hathaway (BRK-A) $128k per share - up 18% the past year.

Kitchen-Table Talks.......

On April 11th, Bill Wrigley Jr. - the 4th generation to lead the company, goes to Virginia for a meeting with Paul Michaels and Oliver Goudet, both of Mars. They ate sandwiches. By the early hours of Monday, they had finalized a deal. Wrigley shareholders will receive $80 per share. Paying 32 times Wrigley's expected earnings for 2008.

Chocolate Confectionary Rankings ($74 billion):

1. Mars...$11 billion
2. Nestle...$9 billion
3. Hershey...$6 billion
4. Kraft Foods...$6 billion
5. Cadbury Schweppes...$5 billion

Sugar Confectionary Rankings ($43 billion):

1. Cadburry Schweppes...$3 billion
2. Perfetti Van Melle...$3 billion
3. Nestle...$1 billion
4. Haribo...$1 billion
5. Mars...$1 billion

Gum Rankings ($19 billion):

1. Wrigley...$7 billion
2. Cadbury Schweppes...$5 billion