A $36 billion merger is turning the snacking world on its head.
Mars, the parent company of M&M's and Snickers, has reached an agreement to purchase Kellanova, the snack food division that Kellogg's spun off last year, in a multibillion-dollar transaction that will form a major new global food powerhouse.
Announced on Wednesday, the acquisition is one of the largest in the food industry in recent years, valuing Kellanova at close to $36 billion, including debt—a significant premium over its share price prior to the initial rumors of the deal.
Kellanova's brand portfolio includes well-known names like Cheez-It, Pringles, Pop-Tarts, Rice Krispies Treats and Eggo, among others.
Combined, the two companies will control about 8% of the snack food market.
The deal, which will be completed in the first half of 2025, will completely transform Kellanova brands, according to Bert Flickinger, managing director at the retail consulting firm Strategic Resource Group in New York. He called the move "long overdue."
"Mars brings to the table one of the greatest research and development teams anywhere in America," Flickinger told WBBM. "Whether it's food for people or food for pets or affordable luxuries like chocolate and M&M's and Mars bars or Dove candy and Dove ice cream, they're very innovative. They make it fun to buy and consume."
And that's exactly what Kellanova brands might need.
“Kellogg and Kellenova, on the other hand, they haven't done anything with Mr. Pringle for a while on the Kellenova side, and they haven't done much with the Rice Krispie characters at Kellogg's ready to eat cereal either,” said Flickinger.