(NEW YORK) — More and more consumers are turning to no-name products to save money on their grocery shopping. M&M maker Mars is therefore spending a lot of money on a new purchase to gain even more shelf space in the snack section.
The candy bar giant, known for brands such as Snickers and Twix, is preparing to buy global snack company Kellanova. The purchase will be made in cash and is valued at $35.9 billion. It will add well-known packaged foods such as Eggo, Pop-Tarts and Pringles to its portfolio.
The family-owned, Virginia-based company announced the deal with the multinational food manufacturer – formerly known as Kellogg Company – in joint press releases on Wednesday, making it one of the largest consumer goods mergers in years.
“Mars will acquire all outstanding shares of Kellanova for $83.50 per share in cash,” the press release states. “All of Kellanova’s brands, assets and businesses, including its snack brands, portfolio of international cereals and pastas, North American plant-based foods and frozen breakfasts, are included in the transaction.”
The deal is expected to close in the first half of next year. Upon completion, Kellanova will become part of Mars Snacking, which is led by Global President Andrew Clarke.
Kellanova, which was spun off from Kellogg Co. last fall when it officially split into two different companies, also includes other popular consumer brands such as Cheez-Its, Rice Krispies Treats, MorningStar Farms, NutriGrain and RXBAR. The Chicago-based company reported net sales of more than $13 billion in 2023.
Privately held Mars, which operates a pet food and veterinary care division in addition to its candy business, had previously expanded its operations beyond candy when it bought healthy snack brand KIND North America for $5 billion in 2020.
Poul Weihrauch, CEO of Mars, Inc., called the upcoming deal “a significant opportunity for Mars to further develop a sustainable and future-proof snacking business.”
“We will honor the heritage and innovation behind Kellanova’s incredible snack and food brands while combining our respective strengths to offer consumers and customers more choice and innovation,” he continued in his statement.
Steve Cahillane, chairman, president and CEO of Kellanova, added that the “historic combination” of the companies was both “a cultural and strategic fit.”
Cahillane boasted of the “attractive purchase price” of the cash transaction and said the move “creates new and exciting opportunities for our employees, customers and suppliers,” expressing confidence that “Mars is a natural home for Kellanova’s brands and employees.”
The fusion of sweet and salty foods is similar to a similar strategy by rival The Hershey Company, which added SkinnyPop with its $1.6 billion acquisition of Amplify Snack Brands Inc. in 2017, followed by Dot’s Pretzels in 2021.
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