HomeInternational NewsMars acquires Kellanova to expand snack portfolio and global presence

Mars acquires Kellanova to expand snack portfolio and global presence

Mars Inc., the producer of M&M’s, has reached an agreement to acquire Kellanova, the company behind popular snacks such as Cheez-It and Pop-Tarts, in an effort to expand its snack portfolio and strengthen its global presence. This transaction, valued at a total of $35.9 billion, including debt, will see Mars pay $83.50 per share in cash.

Kellanova was formed last year when the Kellogg Company was split into two companies. The Chicago-based firm sells many of Kellogg’s most profitable brands, including Pringles, Eggo, Town House, and Rice Krispies Treats. Kellanova reported a net revenue of over $13 billion last year and has around 23,000 employees.

Randal Kenworthy, a senior partner at consulting firm West Monroe, pointed out that the deal will provide Mars with greater bargaining power with both suppliers and retailers. Together, Mars and Kellanova will control approximately 8 percent of the snack market in the United States, second only to PepsiCo, which owns Frito-Lay.

Kenworthy also highlighted that Kellanova has a stronger international presence, which will aid Mars in its global expansion. Additionally, Mars has already implemented numerous improvements in its organizational efficiency that can be applied to Kellanova.

This acquisition marks the largest within the snack sector since JM Smucker Company purchased Hostess for $5.6 billion last year and is among the largest deals in 2024. Steve Cahillane, the CEO of Kellanova, confirmed that Mars had reached out a few months ago to discuss the transaction. He also noted that Kellanova had experienced higher-than-expected revenue in recent quarters.

The transaction is expected to close in the first half of next year, after which Kellanova will become part of Mars Snacking, also based in Chicago. Cahillane anticipates that most Kellanova employees will be integrated into Mars, although some functions may be consolidated.

Based in McLean, Virginia, Mars is one of the largest privately held companies in the United States, generating $50 billion in net revenue last year. Analysts expect U.S. antitrust authorities to closely scrutinize the deal, given the current high food prices. However, Kenworthy believes the deal will likely go through, as there is little overlap between the two companies’ portfolios, especially in healthier snack categories.

The acquisition will also open the door for exciting product combinations such as Skittles-flavored Pop-Tarts or Snickers-flavored Pringles, which have proven popular among consumers. According to Kenworthy, the timing is also ideal, as falling inflation will make snack purchases more appealing, particularly as consumers return to pre-pandemic buying patterns.

Kellanova saw a sales volume increase of 2 percent in North America after lowering prices by 1 percent in the second quarter. Thus, Mars’ acquisition of Kellanova is a strategic move to secure a stronger position in the snack market.

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