As more consumers reach for generic labels to save on money groceries, M&M’s maker Mars is spending big bucks on a new acquisition to gain even more shelf space in the snack aisle.
The candy bar giant, known for brands such as Snickers and Twix, is gearing up to purchase global snacking company Kellanova in an all-cash deal valued at $35.9 billion, which will add well-known packaged foods like Eggo, Pop-Tarts and Pringles to its portfolio.
Snickers bars are seen in this picture illustration taken Feb. 23, 2016.
Dado Ruvic/Reuters
The family-owned, Virginia-based company announced the deal with the multinational food manufacturer — formerly known as the Kellogg Company — in joint press releases on Wednesday, marking one of the largest CPG mergers in years.
What to know about the Mars deal with Kellanova adding snacks, frozen foods and more to its candy business
“Mars will acquire all outstanding equity of Kellanova for $83.50 per share in cash,” the release stated. “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 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.
This photo shows Cheez-It crackers in Concord, N.H., Oct. 14, 2014.
Matthew Mead/AP/FILE
Kellanova, which was spun off from the Kellogg Co. last fall when it officially split up 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 more than $13 billion in net sales in 2023.
Privately owned Mars, which also has a pet food and veterinary care arm in addition to its confectionery business, previously expanded its scope beyond sweets when it bought healthy snack brand KIND North America for $5 billion in 2020.
M&Ms from Mars, Pringles from Kellanova.
Getty Images/Reuters
Poul Weihrauch, CEO of Mars, Inc. called the forthcoming deal “a substantial opportunity for Mars to further develop a sustainable snacking business that is fit for the future.”
“We will honor 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,” his statement continued.
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Steve Cahillane, chairman, president and CEO of Kellanova, added that the “historic combination” of companies was both a “cultural and strategic fit.”
Boasting the “attractive purchase price” of the all-cash transaction, Cahillane said the move “creates new and exciting opportunities for our employees, customers, and suppliers,” stating he’s “confident Mars is a natural home for the Kellanova brands and employees.”
The sweet-meets-salty food merger resembles a similar strategy from competitor The Hershey Company, which added SkinnyPop with the $1.6 billion buyout of Amplify Snack Brands Inc. in 2017, followed by Dot’s Pretzels in 2021.
In a major shakeup in the snack industry, Mars Inc. has announced its acquisition of the popular potato chip brand Pringles in a $36 billion deal. The move is set to solidify Mars’ position as a dominant player in the global food market and could potentially reshape the competitive landscape of the snack industry.
Pringles, known for its iconic cylindrical packaging and unique flavors, has long been a favorite among consumers worldwide. The brand was previously owned by Kellogg Company, which acquired it from Procter & Gamble in 2012. However, with changing consumer preferences and increased competition in the snack market, Kellogg has decided to offload Pringles to focus on its core businesses.
Mars, on the other hand, has been steadily expanding its presence in the food industry through strategic acquisitions and product innovations. The company, best known for its confectionery brands like M&M’s and Snickers, has also been making inroads into the savory snack category with brands like Uncle Ben’s and Seeds of Change.
The acquisition of Pringles is expected to further diversify Mars’ product portfolio and strengthen its position in the snack market. With Pringles’ strong brand recognition and global distribution network, Mars will be able to tap into new markets and reach a wider range of consumers.
Industry experts believe that the merger between Mars and Pringles could have far-reaching implications for the snack industry. The combined resources and expertise of both companies could lead to new product innovations, improved supply chain efficiencies, and enhanced marketing strategies.
However, some analysts have raised concerns about potential antitrust issues and market consolidation resulting from the merger. With Mars already being a major player in the food industry, the acquisition of Pringles could further concentrate power in the hands of a few large corporations.
Despite these concerns, the Mars-Pringles merger is seen as a bold strategic move that could reshape the snack industry for years to come. As consumer preferences continue to evolve and competition intensifies, companies like Mars are looking to stay ahead of the curve by expanding their product offerings and strengthening their market positions.
Overall, the acquisition of Pringles by Mars represents a significant development in the snack industry and underscores the importance of strategic partnerships and acquisitions in today’s fast-paced business environment. As the two companies work towards integrating their operations and leveraging their combined strengths, consumers can expect to see exciting new products and innovations from this powerhouse partnership.
