Wm. Wrigley Jr. acquires Kraft confections

30/06/05 The Wm. Wrigley Jr. Company has announced that it has successfully completed the purchase of various confectionery assets of Kraft Foods Global, Inc. for $1.46 billion. The transaction gives Wrigley ownership of iconic brands such as Altoids, Life Savers, Creme Savers and Sugus, as well as various regional and local brands and additional production capabilities.

As the Company integrates these new brands and facilities into its operations, Wrigley will also realign its supply chain globally. This includes transferring chewing gum production from Chicago to the Wrigley plant in Yorkville, Ill. and phasing out production at the Company's South Side factory over the next 18 months.

Wrigley said the closing of the factory does not diminish the Company's commitment to Chicago, where it will maintain its corporate headquarters as well as its worldwide research and development facility - the Global Innovation Center on Goose Island. He said the Chicago factory move is one among several changes being made, based on a comprehensive global review of the Company's worldwide supply chain.

Based on its recently completed global review, Wrigley also plans to discontinue operations at a newly acquired Kraft facility in Bridgend, Wales, and at its L.A. Dreyfus gum base manufacturing center in Edison, N.J. While the intention is for the Bridgend location to close by early 2006, the phase out of production at Wrigley's L.A. Dreyfus and its Chicago chewing gum plant will be a staged process over the next year and a half.

Additionally, Wrigley plans to sell the North American marketing rights and the Creston, Iowa production facility for the Trolli(R) brand that are part of the Kraft transaction. At the same time, the Company will increase investment and business activity at its manufacturing facilities in Gainesville, Ga. and Yorkville, Ill., as well as at its newly acquired plant in Chattanooga, Tenn.

Wrigley also plans to continue to invest in and expand its corporate and innovation presence in Chicago, reinforcing the City's status as its global headquarters.

Wrigley noted that the Global Innovation Center is the Company's most significant recent local capital investment. The Center features a state-of-the-art pilot plant that will soon be adding confectionery equipment from New Jersey, as a result of the Kraft acquisition, to the gum-making machinery already in place. The new facility will serve as the creative hub for Wrigley's expansive R&D activities in terms of flavor, packaging and product enhancement and design efforts. Additionally, the combination of the Company's strong business growth, increased acquisition activity and expansion into non-gum confections has driven increased staffing needs at the corporate leadership center housed in the Wrigley Building.

The Company will work closely with City officials to ensure a smooth closing of the plant, to explore redevelopment or other possible uses for the site, and to identify other opportunities to reinforce Wrigley's intent to maintain a strong continuing presence in Chicago.