Mars Acquires Cheez-It Maker Kellanova for $36 Billion in Largest Packaged Food Deal of 2023

Family-owned candy giant Mars is acquiring Cheez-It maker Kellanova in a nearly $36 billion deal. The acquisition aims at boosting Mars' snacking division and dealing with inflationary pressures without passing costs to consumers. The deal is set to complete in the first half of 2025, pending regulatory approvals.

Family-owned candy giant Mars is acquiring Cheez-It maker Kellanova in a nearly $36 billion deal, bringing together brands like M&M's, Snickers, Pringles, and Pop-Tarts. Mars will pay $83.50 per share for Kellanova, a 33% premium to its closing price on Aug. 2, before Reuters reported Mars was exploring the acquisition.

The deal is a strategic move to boost Mars' snacking division. Amidst inflation, packaged food companies face stalling growth, and the combined company aims to stabilize prices. Mars CEO Poul Weihrauch mentioned the hope to absorb more costs and alleviate inflationary impacts on consumers.

The U.S. packaged food sector is experiencing robust dealmaking. Investors are concerned about sales declines due to weight-loss drugs, but Mars intends to bolster snacking options and healthier products. Mars' distribution in China and Kellanova's in Africa presents significant growth opportunities.

(With inputs from agencies.)