OAN Staff James Meyers
9:48 AM – Wednesday, August 14, 2024
Candy company Mars will acquire Kellanova for $36 billion, merging some of the biggest U.S. candy and snack brands, both companies announced on Tuesday.
Advertisement
The M&M owner Mars is acquiring the Kellogg spin-off company for $83.50 per share, according to the press release.
With the new addition of Kellanova, this will bring in popular brands like Pringles and Cheez-Its to Mars’ snacking products.
“Kellanova has been on a transformation journey to become the world’s best snacking company, and this opportunity to join Mars enables us to accelerate the realization of our full potential and our vision,” said Steve Cahillane, chairman, president and CEO of Kellanova, in a statement.
Kellanova was formed in 2023 when the Kellogg Co. split into three companies. Kellanova sells some of the most profitable brands on the market, including Eggo, Town House, MorningStar Farms, and Rice Krispies Treats. The brands had a combined net sales of over $13 billion last year and has an estimated 23,000 employees.
As inflation is still up, consumers have had to restrain themselves on spending and have struggled to afford name-brand snacks, which makes acquisitions more attractive. Meanwhile, grocers have moved into private-label options to entice customers who are looking for value.
However, sales of some of their included products, like gum, have decreased in recent years. The latest deal will help Mars expand into areas of needed growth.
“There is significant logic behind Mars acquiring Kellanova, not least because the deal would allow Mars to push more heavily into the savory snacks category where it has virtually no presence,” noted Neil Saunders, managing director of GlobalData. “Savory snacks sales are growing at a faster clip than confectionery, where Mars currently predominates.”
This is the biggest deal in the sector since J.M. Smucker bought Hostess for $5.6 billion last year, and among the largest of 2024, which came in second to ExxonMobil’s $60 billion acquisition of Pioneer Natural Resources.
“The Kellanova brands significantly expand our snacking platform, allowing us to even more effectively meet consumer needs and drive profitable business growth,” Andrew Clarke, global president of Mars Snacking, said in a statement.
The deal is expected to close in the first half of 2025, according to the release.
Stay informed! Receive breaking news blasts directly to your inbox for free. Subscribe here. https://www.oann.com/alerts
Advertisements below
Be the first to comment