Mars to Acquire Kellanova in a Major Snack Food Deal
Mars, the manufacturer of M&M’s and Snickers, announced on August 14 its plans to acquire Kellanova, a significant player in the snack food sector. This multibillion-dollar agreement is expected to create a formidable entity in the industry.
The all-cash deal values Kellanova, known for popular snacks like Pringles and Pop-Tarts, at $35.9 billion, which includes its debt. Mars CEO Poul Weihrauch stated, “By welcoming Kellanova’s portfolio of growing global brands, we have a substantial opportunity for Mars to further develop a sustainable snacking business that is fit for the future.”
This announcement arrives amid rising living costs that are pressuring consumers and prompting companies to manage price increases carefully. Additionally, the acquisition may draw scrutiny from U.S. regulators, who have adopted a stringent approach to corporate consolidations.
Arun Sundaram, an analyst at CFRA Research, expressed his expectation that the deal will attract antitrust attention due to its size, especially in the context of escalating food prices. However, he believes the acquisition is likely to proceed, citing minimal overlap in product categories between the two companies.
Kellanova CEO Steve Cahillane indicated that both companies are in communication with U.S. regulators and anticipate no obstacles. “We have a chocolate factory. A chocolate factory can’t make Pringles,” Weihrauch remarked in a CNBC interview, reinforcing their confidence in the deal.
The acquisition, priced at $83.50 per share in cash, aims to “accelerate our ambition to double Mars Snacking in the next decade, in alignment with global consumer demand trends,” according to Mars. This move will integrate two new billion-dollar brands, Pringles and Cheez-It, into Mars’s portfolio, which already includes 15 billion-dollar brands.
Mars emphasized that snacking represents a large, appealing, and sustainable category that continues to gain significance among consumers. Kellanova reported approximately $13 billion in net sales for 2023 and operates in 180 markets with a workforce of around 23,000 employees.
