2008 Woodie Awards
News to chew on
Alejandra Lima
Issue date: 10/6/08 Section: Business
Earlier this month Napster, once a popular site for downloading free music, was sold for $121 million to Best Buy. This sale worked to Napster's advantage because of a loss in subscribers, money and a 57 percent drop in stock prices this year. Best Buy paid $2.65 per share, almost double the closing price, which was $1.36. Both parties are pleased with this agreement as Chris Gorog, CEO and chairman of Napster states, "We believe Best Buy will be an ideal partner for Napster and are very excited by the benefits that this transaction delivers to our shareholders, partners and employees … We are looking forward to combining our digital media capabilities with Best Buy's resources and global network to extend our digital content platforms." With this sale, Best Buy hopes to have an advantage over their competition, Circuit City and Radio Shack, because they have acquired not only Napster's 700,000 subscribers, but also its mobile services, which Best Buy plans to take advantage of. This merger also gives Best Buy a possible chance to compete against Apple in the digital music market, even though Apple currently holds more than 70 percent of it.
Another merger that took place this month occurred between Wrigley and Mars. Wrigley, founded in 1891, was bought for $23 billion by Mars. The sale will be finalized on Oct. 6, 2008.
Wrigley, most famously known for their chewing gum and breath mint products, will become a separate part of Mars. Wrigley will control their own products, such as Orbit and Juicy Fruit, as well as the non-chocolate Mars candy products, which include Starbursts and Skittles. Mars will focus on their chocolate products like Twix, Snickers and M&Ms.
This is not the first time that Wrigley planned to merge with another candy company. Back in 2002 there was talk about Wrigley merging with Hershey, calling their new potential company "Wrigley Hershey." This merger, which would have cost $12.5 billion, was rejected by the Hershey Trust Company.
Mars will now have the largest market share in the candy industry. They will have approximately 28 percent of U.S. sales, compared with the 14 percent they had before. The merger of these two candy conglomerates will make Mars the world's largest candy maker, forcing Britain's Cadbury company to lose its No. 1 position. This event may lead to more concrete talks of a merger between Cadbury and Hershey.
Although the merger between Cadbury and Hershey has not been done, it is a promising way to help companies survive in today's crashing economy.
Another merger that took place this month occurred between Wrigley and Mars. Wrigley, founded in 1891, was bought for $23 billion by Mars. The sale will be finalized on Oct. 6, 2008.
Wrigley, most famously known for their chewing gum and breath mint products, will become a separate part of Mars. Wrigley will control their own products, such as Orbit and Juicy Fruit, as well as the non-chocolate Mars candy products, which include Starbursts and Skittles. Mars will focus on their chocolate products like Twix, Snickers and M&Ms.
This is not the first time that Wrigley planned to merge with another candy company. Back in 2002 there was talk about Wrigley merging with Hershey, calling their new potential company "Wrigley Hershey." This merger, which would have cost $12.5 billion, was rejected by the Hershey Trust Company.
Mars will now have the largest market share in the candy industry. They will have approximately 28 percent of U.S. sales, compared with the 14 percent they had before. The merger of these two candy conglomerates will make Mars the world's largest candy maker, forcing Britain's Cadbury company to lose its No. 1 position. This event may lead to more concrete talks of a merger between Cadbury and Hershey.
Although the merger between Cadbury and Hershey has not been done, it is a promising way to help companies survive in today's crashing economy.
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