In a deal valued at almost $29 billion, Mars has agreed to acquire Kellanova, the maker of popular snacks such as Cheez-It and Pringles. This acquisition will create a global snacks behemoth, expanding Mars’ portfolio of brands which already includes popular products like Snickers and M&M’s. Kellanova shareholders will receive $83.50 per share in cash, representing a 33% premium to the stock’s closing price before news of the takeover broke. Including debt, the deal is worth $35.9 billion.
Shares in Kellanova surged nearly 8% in pre-market trading following the announcement of the deal, as investors reacted positively to the news. The stock has seen a 28% increase in value so far this month, driven by better-than-expected earnings reports and rumors of a potential acquisition. Kellanova, known for its brands such as Pop-Tarts, Eggo, and MorningStar Farms, raised its sales forecast earlier in the month after reporting strong first-half results.
As consumers become more health-conscious, food companies like Mars and Kellanova are adapting their strategies to meet changing consumer preferences. This deal comes at a time when consumers are prioritizing health and wellness, prompting companies to introduce products aimed at helping people manage their weight. Despite economic challenges such as inflation and high interest rates affecting consumer spending, Mars and Kellanova see significant growth potential in the snacks market.
The acquisition of Kellanova by Mars is one of the largest food and beverage mergers and acquisitions since 1995. It is the fourth-largest M&A deal of the year and will bring two billion-dollar brands, Pringles and Cheez-It, into the Mars portfolio. Mars, a family-owned company with annual sales exceeding $50 billion and a global workforce of 150,000, has been actively acquiring companies in recent years, including Kind bars, Nature’s Bakery, Trü Frü, and Hotel Chocolat.
The deal between Mars and Kellanova is expected to close in the first half of the next year, pending approval from shareholders and regulatory authorities. The acquisition reflects Mars’ continued growth strategy and expansion into the snack market, building on its existing brand portfolio. With the addition of Kellanova’s popular snacks brands, Mars aims to meet consumer needs more effectively and drive profitable business growth in the competitive snacks industry.
