In New York, a box of Kellogg’s Eggo brand frozen waffles was arranged for a photo shoot.
Tiffany Hagler | Bloomberg | Getty Images
Mars will gain Kelanova Companies unite some of America’s largest candy and snack brands with $35.9 billion in cash declare Wednesday.
M&M parent company Mars is acquiring Kellogg The price to spin off the company is $83.50 per share, according to the release. The addition of Kellanova, which was spun off from the parent company in 2023, will bring large brands such as Pringles and Cheez-Its to Mars’ snacks division.
“We acquire businesses to grow businesses, and we want to grow them for generations,” Mars CEO Poul Weihrauch said on CNBC’s “Money Movers.”
The move comes after Kellogg’s separate Last year, its cereal business was handled by WK Kellogg Co, while the remaining snacks and plant-based brands were handled by Kellanova. Kellanova’s net sales in 2023 will exceed $13 billion.
After years of high inflation, some consumers are cutting back on spending and finding it difficult to afford brand-name snacks. Make acquisitions more attractive. Many grocers tend to opt for private label products to appeal to value-seeking consumers.
“Our job as a business is to eliminate as many of these input costs as possible and provide as few inputs to consumers as possible,” Weihrauch told CNBC. “We believe that together we will Become more powerful in neutralizing these shocks.”
Andrew Clark, global president of Mars Snacks, said in a statement that the purpose of Mars’ acquisition is to create “a broader global snack business” through well-known and popular brands.
Weihrauch said there are opportunities for the two companies to grow together in places such as China and Africa. Mars has a larger presence in China and Kelanova has a stronger presence in Africa.
The acquisition could raise antitrust issues, particularly due to the overlap in the candy bar category. Consumer advocacy group Food & Water Watch said in a statement that the deal would harm consumers because Mars could account for nearly half of all snack and cereal bar sales after the deal closes. U.S. grocery shoppers will face higher costs and fewer healthy options, said Amanda Starbuck, the group’s director of research.
Kellanova Chief Executive Steve Cahillane said he did not foresee any antitrust issues. Likewise, Weihrauch said the brands are complementary and the company will work with regulators.
“If you just walk down the aisles of a bar and supermarket, you’ll see that it’s an extremely fragmented space with a lot of choices for consumers,” Casillan said on “Money Movers.”
The growing snack category includes brands that market themselves as healthier. Kellanova will bring products such as RXBar and Nutri-Grain to the Mars business to complement Kind and other Mars snacks, according to a press release.
The deal is expected to close in the first half of 2025, according to a press release.
The acquisition follows months of engagement with Toms Capital Investment Management, which is run by Benjamin Pass, according to a person familiar with the matter. activist fund, which has accumulated a large stake in Kellanova. Thomas Capital has been privately pushing Casillan and Kelanova management to pursue strategic and organizational changes, the person said.
before toms Launched a campaign at Colgate 2022, with Dan Loeb’s Third Point.
—CNBC’s Rohan Goswami contributed to this report
Correction: Mars will acquire Kellanova for $35.9 billion in cash, the companies announced Wednesday. An earlier version incorrectly described the day.
