Dive Brief:
- Mars is expected to complete its $36 billion purchase of Pringles maker Kellanova on Dec. 11 after receiving approval from the European Union.
- The EU, which was the last of 28 regulatory approvals and clearances needed to sign off on the deal, concluded the merger does "not raise competition concerns” and would not result in higher prices for consumers.
- The transaction, which would give the M&M maker ownership of Cheez-It, Pop-Tarts and other snacks, was announced in August 2024 and initially was projected to be completed in the first half of this year. It was delayed, however, after the EU opened an investigation into potential antitrust implications.
Dive Insight:
The merger is the largest in the food and beverage space since the $45 billion tie-up of Kraft Heinz in 2015. Once it closes, Mars will have a deeper presence in the fast-growing salty snacks space to complement its exposure in sweets and confectionery.
“We can’t wait to welcome Kellanova talent to Mars and create a shared, global snacking leader with a beloved range of brands,” Andrew Clarke, global president of Mars Snacking, said in a statement. “We’ve said all along that Mars Snacking and Kellanova will be better together, building on the strength of our respective legacies and capabilities to unlock new possibilities and drive growth."
Mars expects the combined snacking business to generate around $36 billion in annual revenue, with a portfolio that includes nine $1 billion-plus brands. The company will also benefit from Kellanova’s greater presence in parts of the world where it isn’t as dominant, such as Africa.
Analysts expect the greater scale in snacking will better position Mars to compete against Doriotos maker PepsiCo and Oreo parent Mondelēz International.
John Baumgartner, managing director for equity research in food and healthy living for Mizuho Securities USA, said when the deal was announced that Kellanova “makes Mars a more well-rounded competitor" in snacking.
The new company also would have more opportunities for innovation — Kellanova CEO Steve Cahillane previously floated the idea of M&M’s Pop-Tarts. A deeper portfolio also could position Mars to better respond to trends in food, particularly as consumers look for healthier options with greater value.
