Posted on 06/29/2005 11:47:21 AM PDT by Willie Green
For education and discussion only. Not for commercial use.
CHICAGO - Wm. Wrigley Jr. announced Wednesday it has completed its acquisition of Life Savers and Altoids from Kraft Foods Inc. and, as a result, plans to lay off about 500 workers and shutter some factories, including a New Jersey plant.
The $1.46 billion cash deal also gives the Chicago-based candy maker several other brands, including Creme Savers, Sugus candies and some local and regional brands in the United States, Europe, Indonesia and Thailand. But the iconic Life Savers and Altoids brands were the biggest prizes in the acquisition.
Bill Wrigley Jr., Wrigley's chairman and chief executive, said adding the brands "represents a significant reinforcement of our position as a world-class confectionery company."
For Kraft, the sale unloads confectionary brands that generated just 1.6 percent of its $31 billion in revenue last year.
Chicago-based Wrigley said it will close a 94-year-old chewing gum factory on Chicago's South Side and shift production to its plant in Yorkville, Ill., which was built in the 1990s.
The company also plans to shut down its Edison, N.J., factory and transfer gum base production from the plant to its largest production facility in Gainesville, Ga. Wrigley will also wind down production at a newly acquired Kraft factory in Bridgend, Wales, over the next 18 months.
The Edison operation, known as the L.A. Dreyfus Co. was acquired by Wrigley in 1935 when it was located in New York and has been in New Jersey since 1949.
At its peak in the late 1970's, the plant had more than 350 workers. Employment declined over the past two decades as production became increasingly automated, and Wrigley's other production plants starting using more local ingredients.
Wrigley will offer transfers and early retirement to the facility's 150 workers as it discontinues operations over the next year and a half.
Bill Wrigley Jr. said he regretted closing the facility.
"I wish to express my thanks and appreciation to Dreyfus associates for the contributions they have made through the years to the overall success of the Wrigley Company," he said in a prepared statement.
The company said it would work with Edison officials to explore redevelopment options for the site.
At the Chicago plant, Wrigley said the 600 workers will either be transferred, offered early retirement or laid off.
Wrigley said the decision to move production out of Chicago after nearly a century was a difficult one, but stressed the company will maintain its Chicago corporate headquarters and continue to invest in a new research-and-development facility there.
"We value our deep roots in the city of Chicago, even as our business and our work force continue to change," he said in a statement.
Wrigley also said it would sell the Trolli gummy candies brand - part of the Kraft deal - including a Creston, Iowa, production facility.
The purchase price of the brands for Wrigley will be offset by about $300 million in cash tax benefits associated with amortization of intangible assets, the company said. The net acquisition cost of $1.18 billion represents 2.4 times estimated 2004 sales.
Shares of Wrigley fell 46 cents, or less than 1 percent, to $69.14 in late morning trading Wednesday on the New York Stock Exchange. Kraft shares fell 15 cents, or about half a percent, to $31.77.
It's WalMart's fault.
Altoids ... the company with a curiously strong balance sheet.
Not so sweet a deal if your the one losing your job..........pun intended.......
I recently found a box of those in my glove compartment that were at least two years old and they were still strong........
Maybe they can attract some service sector employment, just like they're doing in Wilkes-Barre: Salvation Army, Surplus Freight opening outlets in Wilkes-Barre
You can buy 5 packs of Wrigley's gum at WalMart for a dollar. I dunno how these guys profit.
Wroids
I call on that plant. Lots of history there as they were involved with many brands of gum over the years. Too bad for them and Edison loses another. Maybe that is why Mayor Spadoro got beat in the primary.
Pretty soon I will have to change my screen name due to lack of interest.
In other words they move production from high-tax anti-business cities to lower-tax pro-business cities....How hard is that to understand?
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