Mars agrees to buy Pringles maker Kellanova in $36 billion deal

Mars has announced its intention to acquire Kellanova, the renowned maker of Cheez It and Pringles, in a major commercial deal valued at about $29 billion. According to Kellanova’s regulatory filing, the purchase price for shareholders will be $83.50 per share in cash, representing a hefty 33% premium over the stock’s closing price on August 2, prior to the first reports of the acquisition talks.

When factoring in Kellanova’s debt, the total value of the deal reaches $35.9 billion. This significant acquisition will bolster Mars’ snack portfolio, which already includes popular brands such as Snickers, M&M’s, and Mars bars.

Andrew Clarke, Mars’ Head of Snacking, commented on the deal, stating that the addition of Kellanova’s brands will significantly enhance their snacking platform. This acquisition is expected to better meet consumer demands and drive economic growth for Mars.

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Credit – Getty images

The news has had a positive impact on Kellanova’s stock, which surged approximately 8% in pre-market trading and has risen by up to 28% this month, driven by strong financial results and excitement surrounding the acquisition. Kellanova, established following the spin-off of Kellogg Company’s snacks and seed divisions last year, has increased its sales forecasts after reporting strong results for the first half of the year.

This acquisition, which ranks among the top ten food and beverage mergers and acquisitions since 1995 according to Geologic, is one of the largest M&A deals of the year. It adds two high-value brands—Pringles and Cheez It—to Mars’ already extensive portfolio of 15 brands.

Mars, a family-owned company with annual sales exceeding $50 billion and a workforce of 150,000, has been on a successful acquisition streak in recent years. In 2020, Mars acquired healthy snack company Kind bars and later Nature’s Bakery.

This was followed by the acquisition of Trü Frü, known for its chocolate-covered fruit snacks, in 2022. Additionally, last year, Mars invested over $500 million in Hotel Chocolat, a boutique British chocolate maker.

The completion of the Kellanova acquisition is anticipated in the first half of next year, subject to approval from shareholders and regulatory bodies.

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