It was reported by Reuters earlier this month (5 August 2024) that Mars was exploring the possible acquisition of Kellanova, although at the time it remained unclear whether a deal would come to fruition and if Kellanova was interested in pursuing the opportunity.
However, the two parties have now announced that they have agreed on a deal worth $83.50 per share for a total consideration of $35.9bn, making it the largest acquisition of 2024.
The transaction is anticipated to close within the first half of 2025, with Kellanova set to become part of the Mars Snacking division upon completion. Given the implications of the deal for the snacking sector it could face opposition from regulators in the US, the Financial Times has said.
Historic combination
Announcing the agreement, Kellanova president and CEO Steve Cahillane said: "This is a truly historic combination with a compelling cultural and strategic fit. 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."
Meanwhile, Mars CEO Poul Weihrauch said that by adding Kellanova's portfolio to its snacking division, the company has a "substantial opportunity" to develop a business that is "fit for the future".
"We will honour 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," Weihrauch added.
"We have tremendous respect for the storied legacy that Kellanova has built and look forward to welcoming the Kellanova team."
The Mars Snacking division is headed up by Andrew Clarke, who described the deal as an exciting moment that would allow both companies to achieve their potential.
Clarke continued: "The Kellanova brands significantly expand our Snacking platform, allowing us to even more effectively meet consumer needs and drive profitable business growth. Our complementary portfolios, routes-to-market and R&D capabilities will unleash enhanced consumer-centric innovation to shape the future of responsible snacking.”
Background
Kellanova was formed in 2023 after spinning off from Kellogg’s, and owns two billion-dollar snacking brands in Pringles and Cheez-It. It also remains responsible for cereal brands outside the US such as Corn Flakes and Crunchy Nut, with a presence in 180 markets and approximately 23,000 employees.
Meanwhile, Mars owns well-known snacking brands including Skittles and Snickers, while it also operates ‘Petcare’ and ‘Food and Nutrition’ divisions.
In the UK, Kellanova recently announced the decision to close its Manchester manufacturing site, putting 360 jobs at risk in the process.
