In the latest big news from Epoch Times on August 14, 2024, American candy giant Mars has sealed a deal to acquire snack brand manufacturer Kellanova, which produces popular snacks like Pringles potato chips, for a whopping $35.9 billion in cash. This marks one of the largest acquisitions of the year and one of the biggest in the history of the snack industry.
Mars announced on Wednesday that they will acquire Kellanova at a price of $83.50 per share, representing a premium of about 33% compared to the closing price reported by Reuters on August 2 when the deal was first disclosed. Including debts, the transaction is valued at $35.9 billion.
On Wednesday, Kellanova’s stock surged nearly 8% in early trading on Wall Street. With better-than-expected profits and news of the deal negotiations coming to light, the company’s stock price has already risen by around 28% so far this month.
This mega deal will create a global snacking powerhouse, enhancing Mars’ portfolio of 15 chocolate-based brands – including Snickers, M&M’s, and Mars Bars – with two billion-dollar brands, Pringles and Cheez-It.
According to data from Dealogic, the Kellanova acquisition ranks among the top 10 food and beverage mergers globally since 1995 and is the fourth-largest merger deal so far this year.
Amid rising prices, consumers are turning to lower-cost private label brands. American companies are all seeking to expand their scale in order to boost sales.
Mars stated that due to the enduring appeal of snacks, the company plans to strengthen its snack division, invest locally through this deal, and introduce more healthy food options.
Kellogg Company split its snack and cereal businesses last year, creating Kellanova. In addition to Cheez-It and Pringles, Kellanova also produces Pop-Tarts, Eggo, and MorningStar Farms vegetarian foods. Earlier this month, following strong first-half performance results, the company raised its sales expectations.
Both companies have announced that once the deal is completed in the first half of 2025, Kellanova will become a part of Mars’ snacks division, led by Andrew Clarke, the Global President of Mars Wrigley. The headquarters will be located in Chicago.
Clarke said in a statement, “The Kellanova brands significantly expand our snacking platform, enabling us to better meet consumer needs and drive profitable business growth.”
Mars boasts annual sales exceeding $50 billion and employs 150,000 people globally, and has been on a spree of acquisitions in recent years. In 2020, Mars acquired the North American business of Kind bars, followed by the acquisition of Nature’s Bakery. Two years later, the company acquired TrüFrü, which produces chocolate fruit snacks. Last year, this family-owned company invested over $500 million in acquiring UK luxury chocolate maker Hotel Chocolat.
The Kellanova deal is expected to be finalized in the first half of next year, pending approval from shareholders and regulatory authorities.
Legal experts have told Reuters that since there is limited product overlap between the two companies, this acquisition is not expected to face significant antitrust hurdles.