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Mars will pay $83.50 per share in an all-cash deal for Kellanova,
representing about 33% premium to its closing price on Aug. 2
before Reuters first reported that Mars was exploring a deal for
the Pringles maker.
Shares of Kellanova rose about 8% to $80.45 before the bell. On
an equity basis, it is valued at $28.58 billion, according to a
Reuters calculation.
The deal comes as sales growth at U.S. packaged food companies,
including Kraft Heinz, Mondelez and Hershey, slows due to
budget-strapped customers opting cheaper, private-labels instead
of pricier branded items.
The deal dwarfs Mars' $23 billion takeover of Wrigley in 2008
and would bring under one roof popular consumer brands,
including Mars' Twix, Bounty and Milky Way chocolates as well as
Kellanova's snacks portfolio of Pop-Tarts, Rice Krispies Treats
and Eggo frozen waffles.
The acquisition is also not expected to face too many antitrust
roadblocks due to the limited overlap between the offerings of
the two companies, legal experts had told Reuters.
Kellanova will become part of Mars Snacking, led by Global
President Andrew Clarke and based in Chicago after the
completion of deal in the first half of 2025, the companies
said.
Kellanova, which split from WK Kellogg last October, is rooted
in a salty snacks business and sells cereal outside of North
America. WK Kellogg was left with the North American cereal
business of Kellogg, the original parent company.
Kellanova logged net sales of more than $13 billion in 2023.
The Wall Street Journal reported the terms of the deal earlier
on Tuesday.
(Reporting by Mrinmay Dey and Aishwarya Venugopal in Bengaluru
and Anirban Sen in New York; Editing by Sherry Jacob-Phillips
and Arun Koyyur)
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