Mars spends nearly $36 billion for snack-maker Kellanova

Mars Inc. has purchased Kellanova, the snack company that evolved from Kellogg’s, Mars announced Wednesday morning.

Mars will finance the $35.9 billion dollar deal—a per-share cost of $83.50—with cash and new debt. Kellanova’s shareholders still must approve the deal, which is expected to close in the first half of next year. Reuters called it the biggest deal of the year so far and one of the biggest ever in packaged foods.

Kellanova is allowed to pay quarterly dividends until the transaction closes, according to Mars. Shares of Kellanova closed at $74.50 Tuesday. Before news of the possible acquisition broke, the stock closed at $62.98 on Aug. 2. Since the announcement, the stock has been selling in the low-to-mid $70s per share range.

Kellanova, which split from Kellogg’s in October, produces Pringles, Cheez-It, Pop-Tarts, Eggo as well as some cereals and frozen breakfast foods—all of which are included in the sale. Its better-for-you brands include RXBAR, Special K and plant-based MorningStar Farms.

Poul Weihrauch, CEO, Mars

Mars CEO Poul Weihrauch told Reuters that prices will not increase because of the deal.

"We are a big and stronger company," Weihrauch said to the news agency. "We hope to be able to absorb more costs in our structure and help alleviate the issues we have in an inflationary environment."

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On a website dedicated to the acquisition, Mars says it “has no plans at this time to sunset any Kellanova brands.” When asked specifically about MorningStar Farms via email, a Mars spokeswoman would not comment.

In the press release announcing the deal, Weihrauch said, “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.

“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.”

Steve Cahillane, President and CEO, Kellanova

Kellanova President and CEO Steve Cahillane, in the same press release, said, “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.

“Mars intends to apply its proven brand-building approach to further nurture and grow Kellanova’s brands, including accelerating innovation to meet evolving consumer tastes and preferences, investing locally to expand reach and introducing more better-for-you nutrition options to meet evolving consumer needs,” the statement continued.

Andrew Clarke, Global President, Mars Snacking

Kellanova and the snacking division of Mars both have headquarters in Chicago, Illinois. When the deal closes, Kellanova will become part of Mars Snacking, which is led by Global President Andrew Clarke. However, Battle Creek, Michigan, where Kellogg’s was founded, will continue to be a core location for the organization, Mars said.

Mars, a private company, has purchased better-for-you energy bar brand Kind, fig and oatmeal bar maker Nature’s Bakery and fruit snack brand Tru Fru since 2020, The Wall Street Journal reports.

Reuters and The Wall Street Journal broke the news on Aug. 4 that the two companies had been discussing the deal. Kellanova’s net sales in 2023 passed $13 billion, according to The Wall Street Journal.