M&M’s maker Mars is buying Kellanova, the maker of Cheez-Its and Pop-Tarts for nearly $30 billion, vastly expanding the number of household-name brands under one roof.
Kellanova was created last year when the Kellogg Co. split into three companies. Kellanova sells many of the former company’s most profitable brands, including Pringles, Eggo, Town House, MorningStar Farms and Rice Krispies Treats. It had net sales of more than $13 billion last year and has approximately 23,000 employees.
Mars Inc. said Wednesday that it will pay $83.50 per share in cash. The company put the total value of the transaction at $35.9 billion, including debt.
It 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, coming in second to Exxon Mobil’s $60 billion acquistion of Pioneer Natural Resources.
Mars’ purchase of Kellanova is expected to close in the first half of next year. Once it’s complete, Kellanova will become part of Mars Snacking. Corporate headquarters will remain in Chicago.
Mars, headquartered in McLean, Virginia, is one of the largest privately held companies in the U.S.
“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 other company formed in the Kellogg split, WK Kellogg Co., retained cereal brands like Raisin Bran, Frosted Flakes and Froot Loops, which have struggled with slowing sales in recent years. It is not involved in the deal.
The acquisition would expand Mars’ reach into the salty snack category. The company owns brands like Combos and Uncle Ben’s, but it’s primarily known for its chocolates, candies and pet food. Mars makes M&M’s, Lifesavers, Juicy Fruit gum and Skittles as well as Pedigree and Royal Canin pet foods, among other products.
Sales of some of those products, like gum, have sputtered in recent years as snacking habits shift. The deal helps Mars expand into areas of growth.
It also may help Kellanova at a time when rising prices are squeezing consumers and putting many companies under pressure to put a cap on prices. Economists say that many consumers appear to be returning to pre-pandemic norms, when most companies felt they couldn’t raise prices very much without losing business.
Mars got its start in 1911, when founder Frank Mars started making and selling butter cream candy from his home in Tacoma, Washington. The company moved to Chicago in 1929 and introduced the Snickers bar the following year.
Mars has steadily grown through acquisitions. It entered the pet food business in 1935 with the purchase of a U.K. dog food brand and bought the Dove ice cream brand in 1986. In 2008, it purchased the Wrigley chewing gum business for $23 billion.
Shares of Kellanova rose nearly 8% before the opening bell Wednesday.
Mars Inc., the global confectionery giant known for popular brands such as M&M’s and Snickers, is set to make a major acquisition in the snack food industry. The company has announced plans to acquire Kellanova, the owner of beloved snack brand Cheez-It, in a deal worth close to $30 billion.
This acquisition marks a significant move for Mars Inc. as it expands its presence in the snack food market. Cheez-It, a household name known for its cheesy crackers, has a loyal following of consumers who enjoy its delicious and satisfying snack options. By adding Cheez-It to its portfolio, Mars Inc. is looking to diversify its product offerings and tap into the growing demand for savory snacks.
The deal is expected to bring together two powerhouse brands in the food industry, with Mars Inc.’s expertise in confectionery and Kellanova’s strong presence in the snack food market. This strategic move will allow Mars Inc. to leverage its resources and distribution networks to further grow the Cheez-It brand and reach new consumers around the world.
In a statement announcing the acquisition, Mars Inc. CEO, Grant F. Reid, expressed excitement about the potential for growth and innovation that this deal brings. He highlighted the complementary nature of the two companies’ product portfolios and their shared commitment to quality and innovation.
The acquisition of Kellanova and Cheez-It is just the latest in a series of strategic moves by Mars Inc. to expand its presence in the food industry. The company has been actively seeking opportunities to diversify its product offerings and strengthen its position in key markets.
As the deal moves forward, industry analysts are closely watching to see how Mars Inc. will integrate Cheez-It into its existing portfolio and what new products or innovations may come from this partnership. With both companies known for their commitment to quality and taste, consumers can expect exciting new snack options in the near future.
Overall, the acquisition of Kellanova and Cheez-It by Mars Inc. represents a significant milestone for both companies and the snack food industry as a whole. It will be interesting to see how this deal unfolds and what new opportunities it brings for these iconic brands.
