Confectionery, food and pet care giant Mars has agreed to acquire Kellanova in a $29 billion deal. This is one of the biggest deals of the year.
The U.S. conglomerate, known for sugary snacks such as M&M’s, Snickers and Skittles, plans to pay $83.50 a share for Kellanova, the sources said, adding that Mars would also take on $6 billion in net debt. . They added that official announcements are expected Wednesday morning in New York.
The price Mars is offering to pay is unusual in the consumer sector, especially for a company that makes products that don’t favor health-conscious customers.
What does the Mars deal mean?
Mars’ expected acquisition also comes as consumers have recently cut back on spending after several years of inflation, which has pushed prices for many staples above pre-pandemic levels.
However, Kellanova has so far managed to weather a slowdown in US consumer spending and recently raised its full-year sales forecast after beating expectations with its latest earnings.
The New York-listed company, which makes Pringles, Cheez-It, Rice Krispies Treats and Eggo, was created in 2023 after Kellogg spun off its breakfast cereal and snack businesses.
Mars, which is one of the largest family-owned businesses in the world, has annual sales exceeding $50 billion and a workforce of more than 150,000 employees.
The proposed deal is likely to face significant antitrust hurdles, as competition watchdogs appointed by President Joe Biden’s administration question large mergers and acquisitions.
Dealmaking has slowed sharply in recent years, although it has started to pick up in recent months. If Mars’ acquisition of Kellanova is approved, it is likely to start a new wave of deals in the industry.
