Moody’s revises Wrigley to developing

Moody's Investors Service said it affirmed the Baa1 senior unsecured ratings of Wm. Wrigley Jr. Co. and changed the outlook to developing following the Oct. 6 announcement by parent company Mars, Inc., that it bought out the entire minority equity interest in Wrigley that was held by Berkshire Hathaway.

Mars further announced that it intends to combine its chocolate segment with Wrigley's to create Mars Wrigley Confectionery.

"The 100% ownership by Mars is credit positive because it eliminates the need for the $105 million per year payment to service the preferred dividend to Berkshire," Moody's senior vice president Linda Montag said in a news release.

"The combination with the chocolate business of Mars also adds segment diversity, and opens the door to possible synergies as well as expansion of the cash flow of the business."

The change to a developing outlook reflects uncertainties as to the exact structure of the Mars Wrigley Confectionary business including its legal structure, cash flows, potential synergies and ultimate capitalization, Moody’s added.

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