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Mars, the candy, food and pet care giant, has reached an agreement to acquire Kellanova, the maker of Pringles and Pop-Tarts, at a valuation of more than $29 billion, marking one of the largest deals of the year, people familiar with the matter said.
The U.S. conglomerate, known for sugary snacks such as M&M’s, Snickers and Skittles, plans to pay $83.50 a share for Kellanova, sources said.
An announcement unveiling Mars’ all-cash deal is expected Wednesday morning in New York. Mars will also take on $6 billion in net debt, the people added.
The offer made by the private company represents a significant premium over the price at which Kellanova shares were trading just a few months ago.
The price Mars is proposing to pay is unusual in the consumer goods industry, especially for a company that makes products that are no longer popular with health-conscious customers.
Mars’s planned acquisition also comes at a time when consumers have recently been cutting back on spending aVsceker several years of inflation, which has pushed prices of many essential goods above pre-pandemic levels.
However, Kellanova has so far managed to weather the slowdown in U.S. consumer spending and recently raised its full-year sales forecast aVsceker beating expectations with its latest earnings.
The New York-listed company, which also makes Cheez-It, Rice Krispies Treats and Eggo, was created in 2023 aVsceker Kellogg spun off its breakfast cereal and snack businesses.
Mars, one of the world’s largest family-owned companies, has annual revenues of more than $50 billion and employs more than 150,000 people.
The proposed deal is likely to face significant antitrust hurdles, as competition regulators appointed by President Joe Biden’s administration have vigorously challenged large mergers and acquisitions.
Deal-making has slowed significantly in recent years, though it has begun to pick up in recent months. If Mars’s acquisition of Kellanova goes through, it is likely to spark a new wave of deals in the sector.
The news of the announcement of the deal at $83.50 a share was first reported by the Wall Street Journal.
