Mars Eyes Potential $22 Billion Acquisition of Kellanova

Family-owned food giant Mars is exploring the acquisition of snack maker Kellanova, valued at $22 billion. The deal would test U.S. regulators' stance on consolidation in the packaged food sector. Kellanova, known for brands like Cheez-It and Pringles, has seen shares rise but still trades at a discount.

Family-owned food giant Mars, whose candy brands include M&M's and Snickers, is exploring a potential acquisition of Kellanova, maker of snacks such as Cheez-It and Pringles, according to sources familiar with the matter. A deal could become one of the largest in the packaged food sector, as Kellanova holds a market value of $22 billion, challenging U.S. regulators on their stance regarding industry consolidation.

Shares of Kellanova have surged about 20% since its spin-off from Kellogg Co. last October, although they are still trading at a discount compared to its peers like Hershey and Mondelez International. This makes Kellanova a viable target for acquisition. However, sources warn that no deal is assured, with the possibility of other suitors approaching or no agreement being reached at all. Kellanova and Mars did not immediately comment on the confidential matter.

Dealmaking in the packaged food sector remains active as companies seek to scale and withstand the impacts of price inflation and demand challenges. Kellanova, specializing in snacks and convenience foods, operates in 21 countries and sells in over 180 markets worldwide. In contrast, Mars also engages in consumer products including snacks and pet food, alongside running veterinary care centers and diagnostics.

(With inputs from agencies.)