Mars to Acquire Kellanova for $35.9 Billion in Strategic Deal

Mars, the family-owned global leader in Petcare, Snacking, and Food, and Kellanova, a leading global snacking company, international cereal company, noodle company, plant-based foods company, and North American frozen breakfast foods company, said the two announced a definitive agreement today wherein Mars will acquire Kellanova for $83.50 per share in cash for total consideration valued at $35.9 bln, including assumed net leverage.

Per share transaction price of $12.37 represents a premium of approximately 44% to Kellanova’s unaffected 30-trading day volume weighted average price and a premium of approximately 33% to Kellanova’s unaffected 52-week high as of August 2, 2024. Total value consideration of $183 million represents an acquisition multiple of 16.4x LTM adjusted EBITDA as of June 29, 2024.

According to Mars CEO and office of the president, Poul Weirauch, “With Kellanova’s portfolio of high-growth global brands joining us, there is huge potential for Mars to continue building a sustainable snacking business for the future. We will continue the legacy and disruptive innovation that has built these leading snack and food brands in the first place, in combination with our respective strengths, accelerate this journey to bring more choice and innovation to consumers and customers alike.”. “We have great respect for the storied legacy that Kellanova has built and are excited to have the Kellanova team join us.”

It includes the most popular and trusted food brands such as Pringles, Cheez-It, Pop-Tarts, Rice Krispies Treats, NutriGrain, RXBAR, and others. Outside the United States, it also has Kellogg’s, Eggo, and MorningStar Farms. During 2023, Kellanova alone registered over $13 billion in net sales and delivered products to consumers in 180 markets. It does this with a workforce of about 23,000 people.

The Kellanova portfolio will complement the company’s existing snacking and confectionery brands, including SNICKERS, M&M’S, TWIX, DOVE, and EXTRA, as well as KIND and Nature’s Bakery brands. Mars also includes 10 pet care brands with more than $1 billion of sales: ROYAL CANIN, VCA, PEDIGREE, BANFIELD, WHISKAS, BLUEPEARL, CESAR, SHEBA, ANICURA, and IAMS. With more than 150,000 Associates across its snacking, food, and pet care businesses, Mars had 2023 net sales of over $50 billion.

Steve Cahillane, chairman, president and CEO of Kellanova, said, “This is a truly historical combination with superior cultural and strategic alignment. Through its own transformation and pursuit to be the best snacking company in the world, Kellanova merged with Mars to unlock what is beyond its grasp today and propel itself into a brighter future.”. It’s an all-cash deal at an attractive purchase price. It will leverage value for our shareholders, create new and thrilling opportunities for all the employees, customers, and suppliers. We are extremely excited for the future of Kellanova inside Mars—the modern merger of talent and world-class capabilities, at the heart of both companies, propelled by our shared commitment to the very communities in which we live and work. We are firmly convinced that Mars provides the most natural home for the Kellanova brands with a proven track record and sustainable implementations in nurturing and growing businesses.

It is a large, highly engaging, and powerful category that continues to expand by relevant measures to consumers. Kellanova, as part of the transaction, will join Mars Wrigley Confectionery and its Mars Snacking division under Global President Andrew Clarke, based in Chicago, which will give Mars responsibility for even more brands in more places serving more consumers around the globe.

Andrew Clarke, the global president of Mars Snacking, explained the acquisition in this way, “This is an exciting opportunity to create a broader, global snacking business, allowing Kellanova and Mars Snacking to both achieve their respective full potentials. The Kellanova and Mars Snacking operations and associated brands are in strong strategic and business alignment. Kellanova and Mars share long histories of building globally recognized and beloved brands. The Kellanova brands significantly expand our Snacking platform, allowing us to even more effectively meet consumer needs and drive profitable business growth.”. ” What that means is that as one company we will be reinforcing complementarity through our portfolios and routes to the market, adding R&D capabilities—all driving toward collaboration in consumer-centric innovation for shaping the future of responsible snacking .”