Mars to acquire Kellanova in mega-merger uniting two snacking giants

(Image credit: Kellanova).

14 Aug 2024 --- Mars, Incorporated has entered into an agreement to acquire Kellanova for US$83.50 per share in cash, for a total consideration of US$35.9 billion. The deal is hailed as an opportunity to create a broader, global snacking business and brings together “two values-based and purpose-led businesses.”

All of Kellanova’s brands, assets and operations, including its snacking brands, portfolio of international cereal and noodles, North American plant-based foods and frozen breakfast, are included in the transaction.

“In 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. We will honor the heritage and innovation behind Kellanova’s incredible snacking and food brands while combining our respective strengths to deliver more choice and innovation to consumers and customers,” says Poul Weihrauch, CEO and Office of the President of Mars, Incorporated.

Steve Cahillane, chairman, president and CEO of Kellanova, adds: “Kellanova has been on a transformation journey to become the world’s best snacking company, and this opportunity to join Mars enables us to accelerate the realization of our full potential and our vision.”

“The transaction maximizes shareholder value through an all-cash transaction at an attractive purchase price and creates new and exciting opportunities for our employees, customers and suppliers.”

The deal aims at accelerating innovation and chocolate portfolio diversification for Mars (Image credit: Mars).“We are excited for Kellanova’s next chapter as part of Mars, which will bring together both companies’ world-class talent and capabilities and our shared commitment to helping our communities thrive. With a proven track record of successfully and sustainably nurturing and growing acquired businesses, we are confident Mars is a natural home for the Kellanova brands and employees.”

Upon completion of the transaction, Kellanova — which was split off from WK Kellogg Co in October 2023 — will become part of Mars Snacking, led by global president Andrew Clarke. It will be headquartered in Chicago, US.

Snacking powerhouse

The deal promises accelerated innovation and better-for-you nutritious offerings to meet evolving consumer tastes and preferences as well as broaden Mars’ chocolate portfolio, which the company wants to diversify.

The Mars portfolio includes snacking and confectionery brands Snickers, M&M’s, Twix, Dove and Extra, as well as Kind and Nature’s Bakery. Mars also has ten pet care brands with over US$1 billion in sales, including Royal Canin, VCA, Pedigree, Banfield, Whiska’s, Bluepearl, Cesar, Sheba, Anicur and IAMS.

Kellanova’s snacking brands include Pringles, Cheez-It, Pop-Tarts, Rice Krispies Treats, NutriGrain and RXBAR, as well as food brands like Kellogg’s (international), Eggo and MorningStar Farms.

Mars intends to fully finance the acquisition through a combination of cash-on-hand and new debt, for which commitments have been secured.

The transaction is subject to Kellanova shareholder approval and other customary closing conditions, including regulatory approvals and is expected to close within the first half of 2025. However, the deal is likely to face close scrutiny from competition watchdogs.

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