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" Candy-Maker Mars Grabs for Snacks Business in Kellanova
The privately held candy maker Mars is aiming to boost its presence in the snack business in its $36 billion deal for Kellanova, a former part of the cereal giant Kellogg that was spun off last year. Kellanova owns brands such as Pringles, Pop-Tarts, and Cheez-Its and had 2023 sales of $13 billion.
Mars, the owner of M&M and Skittles candy brands, Kind Bars, Wrigley gum, and Starburst, said it is latching onto snacks because they are growing more important with consumers, saying it would accelerate innovation and invest locally to expand Kellanova’s brands.
Food companies face challenges as higher grocery prices force consumers to pull back on spending. Mars, which also sells brands such as Miracoli pasta sauces and Ben’s Original rice, is a family owned company. About 38% of its sales come from snacks, while 3% come from food, and 59% from pet care.
Citigroup analyst Filippo Falorni said that while salty snacks have been one of the fastest-growing food subcategories over the past decade, it has slowed down significantly. From growing about 6% annually, the category has grown just about 1% so far this year.
Including debt it is the second-biggest deal this year, after General Electric’s $38 billion spinoff of energy services company GE Vernova to shareholders, which has already been completed. Capital One’s $35 billion offer for Discover Financial is third-largest, according to Dealogic.
What’s Next: The deal is expected to close in the first half of 2025. Despite the current administration’s crackdown on big corporate combinations over antitrust fears, executives from the companies told CNBC they don’t expect the deal to encounter antitrust issues.
—Elsa Ohlen and Liz Moyer
