Mars is to acquire brands including Snickers, Pop-Tarts and Nutigrain in what’s believed to be the biggest deal of the year so far.
The $35.9bn (£28bn) cash offer for Kellanova is worth $83.50 per share.
Last year, Kellogg’s split its business into 2 separate entities, WK Kellogg Co and Kellanova.
The group, which has its UK HQ in MediaCity, explained at the time that the two companies would operate independently, with the Kellanova operation, focused on being “forward-facing” handling predominantly snacks and international cereal brands including Frosties, Special K and Coco Pops.
WK Kellogg Co, which is not involved in the deal, instead concentrates on the US, Canada and the Caribbean, handling Frosted Flakes, Special K, Raisin Bran, Rice Krispies and Corn Flakes in those markets.
Kellanova had net sales in 2023 of more than $13 billion, with a presence in 180 markets and approximately 23,000 employees.
“In welcoming Kellanova’s portfolio of growing global brands, we have a substantial opportunity for Mars to further develop a sustainable snacking business that is fit for the future,” said Poul Weihrauch, CEO and Office of the President of Mars, Incorporated.
“We will honour the heritage and innovation behind Kellanova’s incredible snacking and food brands while combining our respective strengths to deliver more choice and innovation to consumers and customers. We have tremendous respect for the storied legacy that Kellanova has built and look forward to welcoming the Kellanova team.”
Steve Cahillane, Chairman, President and CEO of Kellanova, added:
“This is a truly historic combination with a compelling cultural and strategic fit. 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 realisation of our full potential and our vision.
“The transaction maximises shareholder value through an all-cash transaction at an attractive purchase price and creates new and exciting opportunities for our employees, customers, and suppliers. We are excited for Kellanova’s next chapter as part of Mars, which will bring together both companies’ world-class talent and capabilities and our shared commitment to helping our communities thrive. With a proven track record of successfully and sustainably nurturing and growing acquired businesses, we are confident Mars is a natural home for the Kellanova brands and employees.”
Upon completion, the company will become part of Mars Snacking, led by Global President Andrew Clarke and headquartered in Chicago.
“This is an exciting opportunity to create a broader, global snacking business, allowing Kellanova and Mars Snacking to both achieve their full potential,” explained Clarke.
“Kellanova and Mars share long histories of building globally recognised and beloved brands. The Kellanova brands significantly expand our Snacking platform, allowing us to even more effectively meet consumer needs and drive profitable business growth. Our complementary portfolios, routes-to-market and R&D capabilities will unleash enhanced consumer-centric innovation to shape the future of responsible snacking.”
Mars said that the deal added 2 new “billion-dollar” brands to its portfolio, namely Pringles and Cheez-It, as well as health snacking brand RXBAR and NutriGrain “to reflect global trends and preferences.”
It added that the majority of Kellanova snacking brands outperformed category competitors, particularly among Gen Z and Millennial consumers.
The $35.9bn transaction will include all of Kellanova’s brands, assets and operations, including its snacking brands, portfolio of international cereal and noodles, North American plant-based foods and frozen breakfast.
It will be financed through a combination of cash-on-hand and new debt, “for which commitments have been secured.”
While the agreement has been unanimously approved by the Board of Directors of Kellanova, it is subject to shareholder approval.
Providing it also gets regulatory approval, the deal is expected to close within the first half of 2025.
