Mars to buy Cheez-It, Pringles maker Kellanova in mega US$36 billion deal

Family-owned candy giant Mars, whose brands include M&M's and Snickers, said on Wednesday (Aug 14) it would buy Cheez-It and Pringles maker Kellanova in a nearly US$36 billion deal, making it the biggest buyout in the packaged food industry.

Mars will pay US$83.50 per share in an all-cash deal for Kellanova, representing about a 33 per cent premium to its closing price on Aug 2 before Reuters first reported that Mars was exploring a deal for the Pringles maker.

Shares of Kellanova rose about 8 per cent to US$80.45 before the bell. On an equity basis, it is valued at US$28.58 billion, according to a Reuters calculation.

The deal comes as sales growth at US packaged food companies, including Kraft Heinz, Mondelez and Hershey, slows due to budget-strapped customers opting for cheaper, private labels instead of pricier branded items.

The deal dwarfs Mars' US$23 billion takeover of Wrigley in 2008 and would bring under one roof popular consumer brands, including Mars' Twix, Bounty and Milky Way chocolates as well as Kellanova's snacks portfolio of Pop-Tarts, Rice Krispies Treats and Eggo frozen waffles.

The acquisition is also not expected to face too many antitrust roadblocks due to the limited overlap between the offerings of the two companies, legal experts had told Reuters.

Kellanova will become part of Mars Snacking, led by Global President Andrew Clarke and based in Chicago after the completion of the deal in the first half of 2025, the companies said.

Kellanova, which split from WK Kellogg last October, is rooted in a salty snacks business and sells cereal outside of North America. WK Kellogg was left with the North American cereal business of Kellogg, the original parent company.

Kellanova logged net sales of more than US$13 billion in 2023.

The Wall Street Journal reported the terms of the deal earlier on Tuesday.