Buffett Makes Sweet Profit Off Mars Investment

Stock Market

Source: http://www.flickr.com/photos/teegardin/

Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB) Chairman and CEO Warren Buffett has logged a lot of wins in the wake of the late-2000s crisis. During the crisis itself, the firm served as a white knight investor to major companies with a need for a huge amount of cash, and fast. With credit conditions tight, Buffett was able to loan billions to financial institutions like Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS) at high interest rates or in return for preferred stock that paid handsome dividends.

One of the companies that Berkshire lent money to was Mars Inc., which in 2008 needed to finance the $23 billion purchase of Wm. Wrigley Jr. Co. Buffett loaned Mars $4.4 billion and purchased a minority interest in Wrigley for $2.1 billion at a discount to the buyout price.

At the time, Buffett said: “Those of you who know me, know that I have been a big fan of Wrigley’s business model for many years, and I love their products. When you think of a business that’s easy to understand, with favorable long-term economics, and able and trustworthy management — you think of Wrigley. Bringing together these iconic, world-class companies combines Wrigley’s strengths with the deep resources and proven brand-building savvy of Mars and will result in a powerful force for innovation and growth in the global confectionery marketplace.”