Mars to acquire Kellanova in $36 billion all-cash deal

The transaction price represents a premium of approximately 44% to Kellanova’s unaffected 30-trading day volume weighted average price.

Mars, a family-owned, global leader in pet care, snacking, and food, and Kellanova, a global snacking, international cereal and noodles, North American plant-based foods and frozen breakfast foods company, today announced that they have entered into a definitive agreement under which Mars has agreed to acquire Kellanova for $83.50 per share in cash, for a total consideration of $35.9 billion, including assumed net leverage.

The transaction price 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. The total consideration represents an acquisition multiple of 16.4x LTM adjusted EBITDA as of June 29, 2024.

Poul Weirauch, CEO and office of the president at Mars, said, “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. We will honour the heritage and innovation behind Kellanova’s incredible snacking and food brands while combining our respective strengths to deliver more choice and innovation to consumers and customers. We have tremendous respect for the storied legacy that Kellanova has built and look forward to welcoming the Kellanova team.”

He posted on LinkedIn to announce the same.

Kellanova is home to snacking brands including Pringles®, Cheez-It®, Pop-Tarts®, Rice Krispies Treats®, NutriGrain® and RXBAR®, as well as cherished food brands including Kellogg’s® (international), Eggo® and MorningStar Farms®. Kellanova had 2023 net sales of more than $13 billion, with a presence in 180 markets and approximately 23,000 employees.

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

Steve Cahillane, chairman, president, and CEO of Kellanova, added, “This is a truly historic combination with a compelling cultural and strategic fit. Kellanova has been on a transformation journey to become the world’s best snacking company, and this opportunity to join Mars enables us to accelerate the realisation of our full potential and our vision. The transaction maximises shareholder value through an all-cash transaction at an attractive purchase price and creates new and exciting opportunities for our employees, customers, and suppliers. We are excited for Kellanova’s next chapter as part of Mars, which will bring together both companies’ world-class talent and capabilities and our shared commitment to helping our communities thrive. With a proven track record of successfully and sustainably nurturing and growing acquired businesses, we are confident Mars is a natural home for the Kellanova brands and employees.”

Snacking is a large, attractive and durable category that continues to grow in importance with consumers. Upon completion of the transaction, Kellanova will become part of Mars Snacking, led by global president Andrew Clarke and headquartered in Chicago, allowing Mars to bring even more brands to more consumers globally.

Andrew Clarke, global president of Mars Snacking, commented, “This is an exciting opportunity to create a broader, global snacking business, allowing Kellanova and Mars Snacking to both achieve their full potential. 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. Our complementary portfolios, routes-to-market and R&D capabilities will unleash enhanced consumer-centric innovation to shape the future of responsible snacking.”