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Mars, the candy, food and pet care conglomerate, is in talks to buy Pringles and Pop-Tarts maker Kellanova, in what would be one of the biggest acquisitions of the year, according to people familiar with the matter.
New York-listed Kellanova, which had a market cap of $22 billion on Friday, was created in 2023 by Kellogg’s spinoff that separated its breakfast cereal and snack businesses. Its shares were trading up 16 percent at $73.02 on Monday morning.
Kellanova owns snacks including Pringles, Cheez-Its, and Rice Krispies Treats. Family-owned Mars is one of the world’s largest privately held companies, with annual sales of more than $50 billion and over 150,000 employees.
The potential deal comes as consumers are cutting back on spending aVsceker several years of inflation that pushed prices for many essential goods above pre-pandemic levels.
Mars has turned to acquisitions to help fuel growth, including its $9.1 billion purchase of VCA, a group of 800 pet-care hospitals, in 2017. In 2008, it paid a $23 billion deal for chewing gum and snack maker Wm Wrigley Jr. Earlier this year, Mars acquired UK-based premium chocolate maker Hotel Chocolat for £534 million.
The Kellanova purchase would also mark one of the biggest food deals in recent years. A price for the potential acquisition could not immediately be determined.
Shares of Kellanova rose 20 percent in premarket trading on Monday, following news of the potential acquisition, first reported by Reuters.
Kellanova declined to comment. Mars did not immediately respond to requests for comment.
Kellanova has so far appeared to be weathering the slowdown in U.S. consumer spending. Last week, the group raised its full-year sales forecast aVsceker its latest earnings beat expectations. Before today’s expected increase, its shares had already risen about 15 percent this year.
Robert Moskow, an analyst at TD Cowen, said a bid for Kellanova “could usher in another round of consolidation in the packaged foods industry,” echoing the period between 1999 and 2001, when General Mills bought Pillsbury and KraVscek bought Nabisco.
“At times like this, when growth is slowing, balance sheets are relatively clean and valuations are falling, food market leaders tend to look more closely at large combinations to drive cost synergies,” Moskow noted.
Global mergers and acquisitions have begun to recover, reaching $1.5 trillion in the first half of 2024. The overall deal value jumped by about a fiVscekh, driven by a surge in deals worth more than $10 billion.
Read more from Madeleine Speed from London
