Mars, Incorporated

Abstract

Recommended for MBAs, this case is one of a pair of cases used in a merger negotiation exercise. It is designed to be used with "Wm. Wrigley Jr. Company" (UVA-F-1607), but it can also be used on its own. Half of the class prepares only the Wrigley case and the other half uses the Mars case.Wrigley and Mars are in the process of negotiating a merger agreement. Macroeconomic assumptions—particularly forecasting future sugar prices in an uncertain environment—and assumptions about Wrigley's value make Wrigley's future cash flows difficult to predict.

Excerpt

UVA-F-1612

Rev. Nov. 16, 2020

Mars, Incorporated

As a family-owned company for nearly a century, we are guided by our Five Principles: Quality, Responsibility, Mutuality, Efficiency and Freedom. We continually strive to put our Principles in Action in everything we do: making a difference to people and the planet through performance.

—Mars, Incorporated

It had been a beautiful April in McLean, Virginia, in 2008. The last of the snow was long gone, and rain showers were few, making most days clear and warm. It was time to be outside and enjoy the spring blooms of northern Virginia neighborhoods. Instead, John Mitchell had spent the last two weeks in his office poring over financial and nonfinancial considerations of buying Wm. Wrigley Jr. Company. As head of the M&A division of Mars, Incorporated, Mitchell always had his hands full. After all, Mars was always looking to diversify and expand its operations through acquiring other companies. Wrigley, however, was a special case. If on the following day—April 12, 2008—the Mars executive team, Mars family, and Wrigley were to come to an agreement and decide to merge the two companies, Mars would become the biggest company in the confectionery world.

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Keywords: mergers, acquisitions, merger, negotiation, valuation, bargaining, M&A