McLean, Virginia-based Mars announced this week it is buying Chicago-based gum giant Wm. Wrigley Jr. in a $23 billion deal financed by renowned financier Warren E. Buffett. Both company’s boards have approved the deal.  The newly combined Mars/Wrigley will have 14% or more of the global confectioner market, according to Euromonitor International Inc. citing 2006 sales, making Mars the new global candy leader ahead of England’s Cadbury Schweppes with 10%. In the U.S., the combined Mars/Wrigley will become the largest candy company with 27.7% of the U.S. candy market, moving ahead of The Hershey Company which has a 24% market share.

The deal is expected to close in six to 12 months, the companies said, at which time Wrigley will cease to be a publicly traded company. Mars is a private, family-owned company dating back to 1911. It is the eighth-largest private company in the U.S., Forbes magazine said in its November issue.

“The strong cultural heritage of two legendary American companies with a shared commitment to innovation, quality and best-in-class global brands provides a great basis for this combination,” Mars Global President Paul S. Michaels said in a written statement Monday.

According to the Washington Post, the business transaction is the third-biggest so far in 2008, after Microsoft’s $42 billion bid for Yahoo and Swiss Novartis’s $28 million bid for eye-care company Alcon. 

“The true value of this transaction arises primarily from enhanced growth opportunities, including the potential for cross-pollination of people, ideas and brands, and significant enhancements of sales, marketing and distribution infrastructures,” Chairman Bill Wrigley Jr. said in a statement.  Wrigley added that Mars “intends for us to run as a separate, stand-alone entity with a high degree of autonony.” Wrigley will become executive chairman of his company, reporting to Mars’ Michaels. 

In 2007, Mars received 45% of its approximately $25 billion revenue from chocolates and other snacks, with pet food (Whiskas, Sheba and Cesar for cats; Pedigree and Royal Canin for dogs) accounting for approximately 46% of sales.  Mars also owns Uncle Ben’s, a packaged rice company.

Wrigley, a family-controlled company founded in 1891, produces Wrigley’s gum, Orbit, Life Savers and Altoids mints.