Mars Inc. has announced its acquisition of Kellanova, the maker of popular brands such as Cheez-It, Pringles, and Pop-Tarts, for an estimated $36 billion.
The deal, which is one of the largest in the food industry this year, was confirmed on Wednesday, August 14, 2024, with Mars paying $83.50 per share, a 33% premium over Kellanova’s closing price on August 2.
This acquisition marks Mars’ biggest investment to date, eclipsing its $23 billion takeover of Wrigley in 2008.
The deal is expected to strengthen Mars’ position in the snack market, where it already dominates with brands like M&M’s and Snickers.
The combination of Mars and Kellanova’s product portfolios will create a snack empire with a vast array of offerings, catering to diverse consumer tastes across the globe.
Poul Weihrauch, CEO of Mars, emphasized that the acquisition is a strategic move to tap into the growing global demand for branded snacks.
“We are bringing together some of the most beloved snack brands under one roof. This merger not only expands our product lineup but also strengthens our ability to offer value to consumers in a highly competitive market,” Weihrauch stated in an interview.
The merger is also seen as a response to shifting consumer behavior amid ongoing inflationary pressures.
With food prices in the U.S. rising by 25% from 2019 to 2023, both companies are aiming to keep prices stable post-merger, hoping to absorb more costs internally rather than passing them on to consumers.
Kellanova CEO Steve Cahillane highlighted the opportunities the deal presents, particularly in expanding Mars’ presence in markets like Africa and China.
“Our distribution network in Africa and Mars’ strong foothold in China will allow us to explore new opportunities and introduce our iconic brands to a broader audience,” Cahillane noted.
Despite potential antitrust concerns, industry experts believe that the deal will face minimal regulatory hurdles due to the limited overlap in Mars and Kellanova’s product offerings.
The acquisition is expected to be finalized in the first half of 2025, pending regulatory approvals.
The merger comes at a time when the U.S. packaged food sector is witnessing a wave of consolidation, driven by companies seeking scale to navigate an environment where consumers are increasingly opting for private-label brands over established names.
Mars’ acquisition of Kellanova is likely to set the tone for further deals in the industry as companies strive to adapt to changing market dynamics.
Upon completion of the deal, Kellanova will be integrated into Mars Snacking, with Andrew Clarke, the Global President of Mars Snacking, overseeing the newly combined entity.
The company will be headquartered in Chicago, and Cahillane, a veteran of the food and beverage industry, is expected to step down once the merger is finalized.
