Family-owned food company Mars Incorporated has announced a definitive agreement to acquire Kellanova, a prominent player in snacking, cereal and plant-based foods. The acquisition, valued at US$35.9 billion, includes assumed net leverage and is set to further solidify Mars’s position in the global snacking industry.
Mars will pay Kellanova shareholders US$83.50 per share in cash, representing a premium of approximately 44% to Kellanova’s unaffected 30-trading-day volume weighted average price and 33% to its 52-week high as of 2 August 2024. The total consideration reflects an acquisition multiple of 16.4x Kellanova’s last 12 months adjusted EBITDA as of 29 June 2024.
Kellanova – known for its snacking brands such as Pringles, Cheez-It and Pop-Tarts and food brands such as Kellogg’s, Eggo and MorningStar Farms – has a rich history of innovation and quality, with operations in 180 markets and a workforce of approximately 23,000 employees. The company reported net sales exceeding US$13 billion in 2023.
Mars’s acquisition of Kellanova is expected to complement its existing portfolio, which includes well-known brands such as Snickers, M&M’s and Kind. In 2023, Mars reported net sales of more than US$50 billion, driven by its 150,000 associates across pet care, snacking and food businesses. Mars’s pet care portfolio includes the likes of Royal Canin, VCA, Pedigree, Banfield and Whiskas, among others.
Mars Incorporated Chief Executive Officer and Office of the President Poul 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 honour 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. We have tremendous respect for the storied legacy that Kellanova has built and look forward to welcoming the Kellanova team.”
Kellanova Chairman, President and Chief Executive Officer Steve Cahillane added: “This is a truly historic combination with a compelling cultural and strategic fit. Kellanova has been on a transformation journey to become the world’s best snacking company, and this opportunity to join Mars enables us to accelerate the realisation of our full potential and our vision.
“The transaction maximises shareholder value through an all-cash transaction at an attractive purchase price and creates new and exciting opportunities for our employees, customers and suppliers.”
Upon completion of the transaction, Kellanova will become part of Mars Snacking, which will be led by Mars Global President of Snacking Andrew Clarke and headquartered in Chicago.
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.
Clarke commented: “This is an exciting opportunity to create a broader, global snacking business, allowing Kellanova and Mars Snacking to both achieve their full potential. Kellanova and Mars share long histories of building globally recognised and beloved brands.
“The Kellanova brands significantly expand our snacking platform, allowing us to even more effectively meet consumer needs and drive profitable business growth. Our complementary portfolios, routes-to-market and R&D capabilities will unleash enhanced consumer-centric innovation to shape the future of responsible snacking.”
The acquisition is expected to advance Mars’s strategic vision for the future of snacking. The integration of Kellanova’s brands will provide Mars with entry into new snacking categories, including the addition of billion-dollar brands Pringles and Cheez-It to its portfolio.
Moreover, the acquisition will enhance Mars’s health and wellness offerings with products such as RXBAR and NutriGrain, aligning with global consumer trends.
Kellanova’s differentiated brand portfolio will further strengthen Mars’s international market presence, particularly in fast-growing regions such as Africa and Latin America. The combination of complementary capabilities is anticipated to unlock further growth and innovation, benefitting from shared best practices in brand building and enhanced digital capabilities.
In terms of sustainability, Kellanova’s initiatives, such as the Better Days Promise, will complement Mars’s existing sustainability efforts, including its Sustainable in a Generation plan. Kellanova will also contribute to Mars’s Net-Zero commitment and align with its Responsible Marketing code, reinforcing the combined company’s positive societal impact.
Mars intends to fully finance the acquisition through a combination of cash-on-hand and new debt, for which commitments have been secured.
The agreement has been unanimously approved by the Board of Directors of Kellanova. It is subject to Kellanova shareholder approval and other customary closing conditions, including regulatory approvals, and is expected to close within the first half of 2025. ✈
