Mars, the owner of Snickers, M&M's and Whiskas, said in a press release that it will pay 83.50 dollars per share in cash, bringing the total value of the transaction to 35.9 billion dollars, including debt.
The transaction is expected to close in the first half of 2025, according to the press release.
Kellanova, a Chicago-based food manufacturing company, has a series of iconic snacking brands, including Pringles, Eggo, Cheez-It, Town House, MorningStar Farms and Rice Krispies Treats.
"The addition of Kellanova provides Mars snacking with entry into new attractive snacking categories," Mars said. "It will add two new billion-dollar brands -- Pringles and Cheez-It -- to the Mars business, which today includes 15 billion-dollar brands."
Kellanova's net sales in 2023 topped 13 billion dollars. The company has approximately 23,000 employees, with a presence in 180 markets.
Mars holds a 4.5 percent share of the U.S. snacking market, while Kellanova stands at about 3.9 percent, according to GlobalData.
The U.S. food manufacturing sector has seen more mergers in recent years as companies seek to expand their businesses in an effort to weather the impact of inflation and cope with the challenge of the era of price-sensitive consumers.
In March, U.S. food manufacturer Campbell Soup completed the acquisition of Sovos Brands, a Colorado-headquartered convenience food owner, in a 2.33-billion-dollar deal.
The combined company aims to hold prices steady, and not pass on costs from the deal to consumers, said Mars CEO Poul Weihrauch Wednesday. "We hope to be able to absorb more costs in our structure and help alleviate the issues we have in an inflationary environment."
Weihrauch told CNBC that there is opportunity in places like China and Africa for the two companies to grow together. Mars has a larger business in China and Kellanova is stronger in Africa.
Latest comments