Mars agrees to buy Pringles maker Kellanova in $36 billion deal

Hanna Ziady, CNN

London (CNN) — Mars has agreed to bargain Kellanova successful a woody that values nan shaper of Cheez-It and Pringles astatine almost $29 billion.

Kellanova said successful a regulatory filing that its shareholders would person $83.50 per stock successful cash, a 33% premium to nan stock’s closing value connected August 2, earlier Reuters first reported news of a imaginable takeover. Including debt, nan woody is worthy $35.9 billion.

The mega-deal will create a world snacks behemoth, adding a bevy of caller nibbles to Mars’ portfolio of brands, which includes Snickers, M&M’s, and nan Mars bar.

“The Kellanova brands importantly grow our snacking platform, allowing america to moreover much efficaciously meet user needs and thrust profitable business growth,” Andrew Clarke, world president of Mars Snacking, said successful a statement.

Shares successful Kellanova (K) — created erstwhile Kellogg Company separated its snacks and cereal businesses past twelvemonth — were up almost 8% successful pre-market trading. The banal has surged immoderate 28% truthful acold this month, connected better-than-expected net and aft news of woody talks surfaced.

Kellanova, which besides makes Pop-Tarts, Eggo, and MorningStar Farms vegan and vegetarian food, earlier this period raised its income forecast aft reporting beardown first-half results.

The woody unveiled Wednesday, 1 of nan biggest takeovers of nan year, comes arsenic consumers move progressively health-conscious, prompting nutrient groups specified arsenic Nestle to create products aimed astatine helping group negociate their weight.

Consumers are besides cutting backmost connected non-essential spending — arsenic ostentation and precocious liking rates return a wound retired of their budgets — hurting income astatine companies including McDonald’s (MCD), Burger King, and Starbucks (SBUX).

Still, Mars and Kellanova spot plentifulness of scope for maturation successful snacks. “Snacking is simply a large, attractive, and durable class that continues to turn successful value pinch consumers,” Kellanova said.

The Kellanova acquisition ranks successful nan apical 10 world nutrient and beverage mergers and acquisitions since 1995, according to Dealogic. It is nan fourth-largest M&A woody truthful acold this twelvemonth and will adhd 2 billion-dollar brands — Pringles and Cheez-It — to nan database of 15 already owned by Mars.

Family-owned Mars, which boasts yearly income successful excess of $50 cardinal and a world workforce of 150,000, has been connected a buying spree successful caller years. In 2020, it snapped up nan institution down Kind bars and later Nature’s Bakery. Two years later, it bought Trü Frü, which makes chocolate-covered consequence snacks. And past year, it spent much than half a cardinal dollars connected boutique British cocoa shaper Hotel Chocolat.

The Kellanova woody is expected to adjacent successful nan first half of adjacent year, taxable to shareholder and regulatory approval.