Mars Acquiring Kellanova
Family-owned Mars Inc., a global leader in pet care, snacking and food, and Kellanova, a top company in worldwide snacking, international cereal and noodles, North American plant-based foods, and frozen breakfast foods, have entered into a definitive agreement under which Mars will acquire Kellanova for $83.50 per share in cash, for a total consideration of $35.9 billion, including assumed net leverage. According to the companies, this is the largest acquisition of 2024 to date, while analysts described it as the largest CPG transaction since the merger between Kraft and H.J. Heinz in 2015.
Comprising such famous snacking brands as Pringles, Cheez-It, Pop-Tarts, Rice Krispies Treats, NutriGrain and RXBar, as well as beloved food brands including Kellogg’s (international), Eggo and MorningStar Farms, Kellanova had 2023 net sales of more than $13 billion, with a presence in 180 markets and around 23,000 employees. Its brands complement the existing Mars portfolio, which includes such popular snacking and confectionery brands as Snickers, M&M’s, Twix, Dove and Extra, along with Kind and Nature’s Bakery. Mars also has 10 pet care brands with more than $1 billion in sales, among them Royal Canin, VCA, Pedigree, Banfield, Whiskas Bluepearl, Cesar, Sheba, Anicura and Iams. With more than 150,000 associates across its pet care, snacking and food businesses, Mars reported 2023 net sales of more than $50 billion.
“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,” noted Poul Weihrauch, CEO and office of the president of McLean, Va.-based Mars. “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. We have tremendous respect for the storied legacy that Kellanova has built and look forward to welcoming the Kellanova team.”
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Added Steve Cahillane, chairman, president and CEO of Chicago-based Kellanova: “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 realization of our full potential and our vision. The transaction maximizes shareholder value through an all-cash transaction at an attractive purchase price and creates new and exciting opportunities for our employees, customers and suppliers. 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. With a proven track record of successfully and sustainably nurturing and growing acquired businesses, we are confident Mars is a natural home for the Kellanova brands and employees.”
Once the transaction is complete, Kellanova will become part of Mars Snacking, headed by Global President Andrew Clarke and based in Chicago, enabling Mars to bring even more popular brands to a greater number of consumers around the world. Mars plans to further nurture and grow Kellanova’s brands, including the acceleration of innovation to meet evolving consumer tastes and preferences, local investment to expand reach and the introduction of more better-for-you nutrition options.
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“This is an exciting opportunity to create a broader, global snacking business, allowing Kellanova and Mars Snacking to both achieve their full potential,” said Clarke. “Kellanova and Mars share long histories of building globally recognized 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.”
According to the companies, the deal advances a strategic vision for the future of snacking in the following ways:
Furthers ambition to double Mars Snacking in the next decade, in alignment with global consumer demand trends. Kellanova provides Mars Snacking with entry into new attractive snacking categories, adding two new billion-dollar brands – Pringles and Cheez-It – to the Mars business, which today features 15 billion-dollar brands. It will also expand the Mars health-and-wellness snacking portfolio with complementary products like RXBar and NutriGrain.
Enhances portfolio with addition of category-leading and growing brands. Kellanova’s differentiated brand portfolio delivers category leadership and platforms poised for future growth. Most of its snacking brands outperform category competitors, particularly among Gen Z and Millennial consumers.
Delivers stronger, differentiated portfolio and distribution platform for priority international markets. Kellanova’s globally recognized portfolio contains beloved and growing brands with untapped potential, especially in such fast-growing geographies as Africa and Latin America.
Unites world-class talent with solid brand-building experience. Both companies have portfolios of some of the world’s most iconic brands, all of which have been nurtured and grown by world-class talent with deep expertise. The acquisition will enable each company’s talent base to take advantage of greater combined resources and professional development opportunities.
Combines complementary capabilities to spur growth and consumer-centric innovation. The addition of Kellanova’s R&D capabilities will permit the combined business to share best practices in brand building, deliver improved digital capabilities, develop complementary channel strengths, and further brand ecosystems and immersions.
Increases positive societal impact of strong sustainability efforts. Kellanova’s long history of social and environmental leadership includes its Better Days Promise initiative, complementing Mars’ Sustainable in a Generation Plan, which has made tangible progress, including the strong decoupling of business growth from greenhouse-gas emissions. Kellanova will also become part of the Mars Net Zero commitment and align with the Mars Responsible Marketing code.
Under the terms of the deal, Mars will acquire all outstanding equity of Kellanova for $83.50 per share in cash, for a total enterprise value of $35.9 billion. All of Kellanova’s brands, assets and operations are included in the transaction. Mars plans 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 Kellanova’s board of directors, although subject to Kellanova shareholder approval and other customary closing conditions, including regulatory approvals, and is expected to close during the first half of 2025. The W.K. Kellogg Foundation Trust and the Gund family have entered into agreements under which they’ve committed to vote shares representing 20.7% of Kellanova’s common stock, as of Aug. 9, 2024, in favor of the transaction.
After the deal closes, Battle Creek, Mich. – the historic hometown of Kellogg’s brands – will remain a core location for the combined organization.
A dedicated website has launched to provide ongoing information on the transaction.
Last year, Kellanova, which was formerly known as Kellogg Co., completed the previously reported separation of its North American cereal business, WK Kellogg Co, resulting in two independent public companies.
