Business
Mars, Maker Of M&M’s And Snickers, To Buy Cheez-It Owner Kellanova For Nearly $30 Billion
Mars, the producer of M&Ms, is paying roughly $30 billion to acquire Kellanova, the maker of Cheez-Its and Pop-Tarts. This will combine a slew of household-name brands.
Kellanova was formed last year when the Kellogg Company was divided into three entities. Kellanova offers many of the old company’s most successful brands, such as Pringles, Eggo, Town House, MorningStar Farms, and Rice Krispie Treats. Last year, it achieved net revenues of more than $13 billion and employs around 23,000 people.
Mars, Maker Of M&M’s And Snickers, To Buy Cheez-It Owner Kellanova For Nearly $30 Billion
Mars Inc. announced Wednesday that it would pay $83.50 per share in cash. The corporation estimated the purchase was worth $35.9 billion, including debt.
It is the largest transaction in the industry since J.M. Smucker purchased Hostess for $5.6 billion last year and one of the largest in 2024, trailing only Exxon Mobil’s $60 billion acquisition of Pioneer Natural Resources.
Mars’ acquisition of Kellanova is likely to be finalised in the first half of next year. Once completed, Kellanova will be incorporated into Mars Snacking, and the corporate headquarters will remain in Chicago.
Mars, based in McLean, Virginia, is one of the largest privately held firms in the United States.
“The Kellanova brands significantly expand our snacking platform, allowing us to even more effectively meet consumer needs and drive profitable business growth,” said Mars Snacking’s global president, Andrew Clarke.
WK Kellogg Co., the second firm founded after the Kellogg split, retains cereal names such as Raisin Bran, Frosted Flakes and Froot Loops, which have seen sales decline in recent years. It is not involved in the transaction.
The acquisition would broaden Mars’ presence in the salty snack market. The company owns several brands, including Combos and Uncle Ben’s, but it is most known for its chocolates, sweets, and pet food. Mars produces M&Ms, Lifesavers, Juicy Fruit gum, Skittles, Pedigree and Royal Canin pet meals, among other things.
Some of those products, such as gum, have seen sales decline in recent years as eating patterns have changed. The agreement allows Mars to expand into new areas of growth.
It may also benefit Kellanova when growing prices pinch customers and pressure many enterprises to control prices. Economists say many consumers are returning to pre-pandemic norms when most businesses believed they couldn’t raise prices significantly without losing customers.
Mars, Maker Of M&M’s And Snickers, To Buy Cheez-It Owner Kellanova For Nearly $30 Billion
The company was founded in 1911 by Frank Mars, who started creating and distributing buttercream sweets from his house in Tacoma, Washington. The firm relocated to Chicago in 1929 and debuted the Snickers bar the following year.
Mars has gradually expanded through acquisitions. It entered the pet food industry in 1935 by purchasing a U.K. dog food company and acquired the Dove ice cream brand in 1986. It paid $23 billion to buy Wrigley’s chewing gum business 2008.
Kellanova stock gained over 8% before the opening bell on Wednesday.
SOURCE | AP