London
CNN
—
Tuesday agreed to buy Kelanova, the maker of Cheese-It and Pringles, in a deal valued at nearly $29 billion.
Kelanova said in a regulatory filing that its shareholders will receive $83.50 per share in cash, a 33% premium to the stock’s closing price on Aug. 2, before Reuters first reported news of the acquisition. Including debt, the deal is valued at $35.9 billion.
The mega-deal will create a global snacks behemoth, whose portfolio of Mars brands includes Snickers, M&M’s and Mars Bar.
“Kellanova brands significantly expand our snacking platform, allowing us to more effectively meet consumer needs and drive profitable business growth,” said Andrew Clark, global president of Mars Snacking, in a statement.
Shares in Kellanova ( K ) — formed last year when Kellogg spun off its snacks and cereal businesses — rose nearly 8% in premarket trading. Shares are up 28% so far this month after better-than-expected earnings and contract talks emerged.
Kellanova, which also makes Pop-Tarts, Eggo, and MorningStar Farms vegetarian and vegan foods, reported strong first-half results earlier this month and raised its sales forecast.
The deal, announced on Wednesday as one of the biggest acquisitions of the year, will spur food groups such as Nestlé to develop products aimed at helping consumers become increasingly health-conscious. People manage their weight.
Consumers cut back on non-essential spending as inflation and high interest rates drain their budgets — hurting sales at companies including McDonald’s ( MCD ), Burger King, and Starbucks ( SBUX ).
However, Mars and Kelanova see more growth opportunities in snacks. “Snacks are a large, attractive and durable category that continues to gain importance with consumers,” Kelanova said.
According to Dealogic, the Gelanova acquisition ranks among the top 10 global food and beverage mergers and acquisitions since 1995. It’s the fourth major M&A deal so far this year and will add two billion-dollar brands — Pringles and Cheese-It — to the list of 15 already owned by Mars.
Family-owned Mars, with more than $50 billion in annual sales and 150,000 global employees, has been on an acquisition spree in recent years. In 2020, it acquired the company behind Kind Bars and later Nature’s Bakery. Two years later, it acquired Tru Fru, a maker of chocolate-covered fruit snacks. Last year, it spent more than half a billion dollars on British chocolate maker Hotel Chocolate.
The Kelanova deal is expected to close in the first half of next year, subject to shareholder and regulatory approvals.
This article has been updated with additional information. Anna Kuban reports.
