Moody's reviews Wrigley

Moody's Investors Service said it expects to downgrade Wm Wrigley Jr. Co.'s senior unsecured notes to Ba2 from A1 based on the expected structure of its pending merger with Mars, Inc.

Under the merger agreement, Mars will acquire 100% of Wrigley common stock for $80 per share, or for $23 billion. When completed, Wrigley will become a privately held subsidiary of Mars.

Funding will include an $11 billion equity contribution from Mars, a $4.85 billion syndicated senior secured debt facility and $4.4 billion of subordinated debt.

Ratings after the deal closes will reflect higher financial leverage at Wrigley resulting from $9 billion in transaction-related debt, the agency said.

Ratings also will consider Wrigley's modest scale relative to peers, its narrow product portfolio and an unfavorable financial policy shift, according to Moody's.

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