How Mars’ Nearly $36 Billion Kellanova Acquisition Could Impact CPG
Mars, Incorporated plans to acquire Kellanova for $35.9 billion, a significant purchase that would have lasting effects across the CPG space.
The two companies have entered a definitive agreement in which Mars would gain ownership of the company’s 180-market presence and household-name brands including Pringles, Cheez-It, Pop-Tarts, Rice Krispies, NutriGrain, Eggo, MorningStar Farms, and more.
Mars’ current portfolio includes snacking and confectionary brands Snickers, M&Ms, Twix, Dove, Extra, Kind, and more, along with pet care brands Royal Canin, Cesar, Iams, and others. In 2023, the company reported net sales of more than $50 billion. For Kellanova, 2023 net sales were over $13 billion.
Read more: Kellanova CTO shared details into the company’s leap into artificial intelligence.
“In welcoming Kellanova’s portfolio of growing global brands, we have a substantial opportunity for Mars to further develop a sustainable snacking business that is fit for the future,” said Poul Weihrauch, Mars CEO and office of the president.
Kellanova’s president and CEO Steve Cahillane said the acquisition would help accelerate its snacking transformation, and Mars’ acquisition history would help nurture and grow the business.
The move comes after Kellanova split into two independent, public companies for “greater operational focus and fit-for-purpose strategy and resource allocation.”
Acquisition Impact
The transaction is set to be among the largest in packaged food since the 2015 Kraft and H.J Heinz merger. And Mars is no stranger to large acquisitions, having purchased the Wrigley business for $23B in 2008.
Antri-trust hurdles could slow down the deal, according to CNBC’s David Faber, who said the acquisition would result in control of more than a quarter of the snack bars market.
Finances come into question, too, per Neil Saunders, managing director of GlobalData Retail. The price tag would make generating sufficient returns challenging, even as the deal pushes Mars further into savory snacks where it currently has a light presence.
“Savory snacks sales are growing at a faster clip than confectionery, where Mars currently predominates,” he says. “Moreover, with a 13.3% share of the worldwide confectionery market, it will become increasingly difficult for Mars to eke out further gains over the years ahead. As such the business needs to diversify, and acquiring Kellanova would allow Mars to do this in a big way.”
Mars’ Acquisition Goals
The transaction would add two billion-dollar brands to Mars' portfolio: Pringles and Cheez-It. It would also expand its snacking categories with brands like RXBar and NutriGrain.
The global snacking and pet care brand outlined its vision for the purchase, which includes:
- Doubling Mars Snacking over the next 10 years
- Enhancing its portfolio with strong category competitors that resonate, especially with young consumers
- Delivering a stronger distribution platform for key international markets
- Tapping into greater combined resources and professional development opportunities for talent
- Unlocking consumer-centric innovation through digital capabilities and R&D
- Progressing on sustainability efforts
Also read: Learn how Mars has evolved its centers of excellence to better meet modern consumer needs.
Upon closing, Kellanova would become part of Mars Snacking with global president Andrew Clarke overseeing the business.
“This is an exciting opportunity to create a broader, global snacking business, allowing Kellanova and Mars Snacking to both achieve their full potential,” said Clarke in a statement. “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,” he added. “Our complementary portfolios, routes-to-market, and R&D capabilities will unleash enhanced consumer-centric innovation to shape the future of responsible snacking.”
