Wm. Wrigley Jr. Co. said Thursday that it has agreed to buy the Joyco gum and candy business from privately held Spanish food conglomerate Agrolimen, expanding its business in Europe.
The $272 million cash deal includes Joyco’s operations in China, France, India, Italy, Poland and Spain, as well as Cafosa, its base business of chewing and bubble gum.
The deal will add Boomer Bubble gum, Pim Pom lollipops and Solano candy to Wrigley’s products and is expected to add to earnings in 2005, the company said.
Wrigley, whose brands include Juicy Fruit and Doublemint, said the purchase will expand its product line in Europe.
The company is settling on smaller brands after its plan to buy Hershey Foods Corp. for $12.5 billion was rejected in late 2002.
William Wrigley Jr., chairman and chief executive of the Chicago-based company, said the Joyco businesses are a good strategic fit with significant future potential for the world’s largest chewing-gum manufacturer.
“The addition of the strong brands, people and confectionery expertise from Joyco will increase the long-term success of our business and enhance our ability to weave our brands into the fabric of everyday life around the world,” Wrigley said.
In a report, Deutsche Bank analyst Eric Katzman said he expects Wrigley to follow up the Joyco deal with other acquisitions, most likely in Asia, South America or Europe.
“Additional privately held gum and confection companies are in Wrigley’s sights, and it is likely that more announcements occur over time,” wrote Katzman.
The deal does not include Joyco’s operations in the Americas or any of its other joint ventures, Wrigley said.
The proposed acquisition, which is subject to regulatory approval, is expected to become final by 2005.
Shares of Wrigley lost 10 cents, to $56.16, on the New York Stock Exchange.
