Minority investments rise amid credit crunch

By Jessica Hall

PHILADELPHIA (Reuters) - Warren Buffett's investment in Wm Wrigley Jr Co (WWY.N: Quote, Profile, Research, Stock Buzz) and Kirk Kerkorian's purchase of Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) stock this week brought big names to the growing trend of buying small stakes.

As tightening credit markets have made it more difficult and costly to raise funds for large acquisitions, investors have opted to buy smaller stakes in companies rather than pursuing full takeovers.

April marked the eighth consecutive month of increasing minority-stake acquisitions, according to Thomson Reuters.

Globally, 93 percent of deals by dollar value involved the purchase of a minority stake, marking the highest monthly proportion of total deals since January 2006, according to Thomson Reuters.

"There are funds with a lot of capital to invest and they are finding opportunistic ways to invest it," said Robert Kennedy, a private equity lawyer at Jones Day in New York.

"It's part of a broader strategy they are adopting. There's not all the cookie-cutter deals of a large, full-scale acquisition. Those opportunities are becoming fewer and farther between," Kennedy said.

So far this year, the number of global deals involving minority investments has risen to 4,000, up 32 percent from the same period a year ago. The number of such deals in the United States has more than doubled to 444 deals, up from 220 a year ago, according to research firm Dealogic.

In the case of Wrigley, Mars Inc will purchase the chewing-gum company with the help of $17.2 billion in combined funding from JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz) and Goldman Sachs Group Inc (GS.N: Quote, Profile, Research, Stock Buzz) -- and about $6.5 billion in help from Buffett.