Global food, snack and candy makers Mars Inc. and Kellanova have entered into a deal under which Mars has agreed to acquire Kellanova for $83.50 per share in cash, for a total consideration of $35.9 billion. Upon completion of the transaction, Kellanova will become part of Mars Snacking and will be led by Global President Andrew Clarke.
“The Kellanova brands significantly expand our snacking platform, allowing us to even more effectively meet consumer needs and drive profitable business growth,” said Clarke. “Our complementary portfolios, routes-to-market and R&D capabilities will unleash enhanced consumer-centric innovation to shape the future of responsible snacking.”
McLean, Virginia-based Mars is a global leader in pet care, snacking and food. Chicago-based Kellanova is a leading company in global snacking, international cereal and noodles; North American plant-based foods; and frozen breakfast foods. It is home to snacking brands including Pringles, Cheez-It, Pop-Tarts, Rice Krispies Treats, NutriGrain and RXBAR, as well as food brands including Kellogg’s international, Eggo and MorningStar Farms.
In October 2023, The Kellogg Co. split into two companies, naming the snacking business Kellanova and naming the North American cereal business WK Kellogg Co.
Kellanova had 2023 net sales of more than $13 billion, with a presence in 180 markets and approximately 23,000 employees.
Mars’ portfolio includes snacking and confectionery brands such as Snickers, M&M’s, Twix, Dove and Extra, as well as Kind and Nature’s Bakery, and it also has 10 pet care brands. Mars had 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,” said Poul Weihrauch, CEO and office of the president of Mars Inc. “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, chairman, president and CEO of Kellanova, added: “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.”
Mars intends to fully finance the acquisition through a combination of cash on hand and new debt, for which commitments have been secured. The Kellanova board has approved the deal unanimously. The transaction is subject to Kellanova shareholder approval and other customary closing conditions, including regulatory approvals, and the companies expected it to close within the first half of 2025.
The transaction price includes assumed net leverage, representing a premium of approximately 44% to Kellanova’s unaffected 30-trading day volume weighted average price and a premium of approximately 33% to Kellanova’s unaffected 52-week high as of Aug. 2, 2024. The total consideration represents an acquisition multiple of 16.4x last 12 months (LTM) adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) as of June 29, 2024.
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