As Mars announced on Wednesday morning, Mars Inc. has purchased Kellanova, the snack company that spun off from Kellogg’s.
Mars will finance the $35.9 billion deal – priced at $83.50 per share – with cash and new debt. Kellanova shareholders still have to approve the deal, which is expected to close in the first half of next year. Reuters called it the biggest deal of the year so far and one of the greatest of all time in packaged foods.
Mars said Kellanova will be allowed to pay quarterly dividends until the deal closes. Kellanova shares closed at $74.50 on Tuesday. Before news of the possible acquisition broke, the closing price on August 2 was $62.98. Since the announcement, the stock has been trading between $70 and $75 per share.
Kellanova, the Separation from Kellogg’s in October produces Pringles, Cheez-It, Pop-Tarts, Eggo, and some cereals and frozen breakfast items – all included in the deal. Healthier brands include RXBAR, Special K, and plant-based MorningStar Farms.
Poul Weihrauch, CEO, Mars
CEO of Mars Poul Weihrauch told Reuters that prices will not rise as a result of the deal.
“We are a larger and stronger company,” Weihrauch told the news agency. “We hope that we can absorb more costs in our structure and thus help alleviate the problems we have in an inflationary environment.”
On a Website dedicated Mars said there are “currently no plans to decommission Kellanova brands.” A Mars spokeswoman declined to comment on a specific question about MorningStar Farms via email.
In the press release announcing the transaction, Weihrauch said: “The addition of Kellanova’s portfolio of growing global brands presents significant opportunities for Mars to further develop a sustainable and future-proof snacking business.
“We will honor the heritage and innovation behind Kellanova’s incredible snack and food brands while combining our respective strengths to offer consumers and customers more choice and innovation.”
Steve Cahillane, President and CEO, Kellanova
Kellanova President and CEO Steve Cahillanesaid in the same press release: “We look forward to Kellanova’s next chapter as part of Mars, where we will bring together the world-class talent and capabilities of both companies and our shared commitment to the success of our communities.
“Mars intends to apply its proven brand-building approach to further promote and grow Kellanova’s brands. This includes accelerating innovation to meet evolving consumer tastes and preferences, investing locally to expand reach and introducing more healthier nutritional options to meet evolving consumer needs,” the statement continued.
Andrew Clarke, Global President, Mars Snacking
Kellanova and Mars Snacking are both headquartered in Chicago, Illinois. Upon completion of the transaction, Kellanova will become part of Mars Snacking, which is led by Global President Andrew ClarkeHowever, Battle Creek, Michigan, where Kellogg’s was founded, will remain a central location for the company, Mars said.
Mars, a private company, has bought healthier energy bar brand Kind, fig and oat bar maker Nature’s Bakery and fruit snack brand Tru Fru since 2020. The Wall Street Journal reports.
Reuters And The Wall Street Journal brought the news on August 4 that the two companies had been negotiating the deal. Kellanova’s net sales in 2023 exceeded $13 billion, according to The Wall Street Journal.
