Mars to acquire Pringles maker Kellanova in largest buyout in packaged goods history

Confectionary giant Mars has announced it will acquire Pop-Tarts and Pringles maker Kellanova in a deal worth US$36 billion, making it one of the biggest deals of the year and the largest buyout in the history of the packaged goods industry. 

 

Kellanova was established in 2023, following Kellogg's split into WK Kellogg, a North American cereal company, and Kellanova, a snacking and international cereal business that manufacturers brands such as Cheez-It, Rice Krispies Treats, and Eggo waffles. If the deal goes through, Mars will also own cereal brands outside of North America, such as Special K and Kellogg's Corn Flakes.

 

One of the world’s largest family-owned businesses, Mars—known for sugary snacks such as M&M’s, Snickers and Skittles—agreed to pay $83.50 a share for Kellanova in an all-cash transaction and will also take on more than $6 billion in net debt.

 

The buyout comes at a time when the US packaged food businesses, such as Kraft Heinz, Mondelez, and Hershey, are seeing a slowdown in sales growth as consumers on a tight budget choose less-expensive private labels over more expensive branded goods.

 

The acquisition eclipses Mars' US$23 billion takeover of Wrigley in 2008 and would combine Kellanova's snack portfolio, which includes Pop-Tarts and Rice Krispies Treats, with well-known consumer brands like Mars' Twix, Bounty, and Milky Way chocolates under one roof.

 

 

Mars said it hoped to complete the deal within the first half of 2025. Upon completion of the transaction, Kellanova will become part of Mars Snacking, led by global president Andrew Clarke and headquartered in Chicago.

 

“This is an exciting opportunity to create a broader, global snacking business, allowing Kellanova and Mars Snacking to both achieve their full potential," said Andrew Clarke, global president of Mars Snacking. "Our complementary portfolios, routes-to-market and R&D capabilities will unleash enhanced consumer-centric innovation to shape the future of responsible snacking.”

 

Given that competition watchdogs hired by US President Joe Biden's administration have been actively opposing large mergers and acquisitions, the deal will likely encounter significant antitrust obstacles.

 

However, Mars has said that they don't expect major regulatory scrutiny because the Mars and Kellanova businesses are complementary and they don't sell the same products. 

 

In July, one of Kellanova's biggest brands, Pringles, awarded its global creative account to FCB following a review. The Interpublic Group agency takes over from WPP’s Grey, which had held the account for 27 years.

 

The past few years have seen a significant slowdown in dealmaking, but it has recently begun to pick up. A new wave of deals for the sector is expected to be initiated if the approval of the Mars acquisition of Kellanova goes through.