It Is Confirmed: Mars to Acquire Kellanova for USD35.9bn
A definitive agreement between Mars, Incorporated and Kellanova was announced. According to the deal, Mars will buy Kellanova for cash at a price of USD83.50 per share, or USD35.9bn, including assumed net leverage.
As of August 2, 2024, the transaction price is roughly 44% higher than Kellanova’s unaffected 30-trading day volume weighted average price and approximately 33% higher than Kellanova’s unaffected 52-week high. As of June 29, 2024, the total price amounts to 16.4x LTM adjusted EBITDA, which is the acquisition multiple.
Kellanova is home to iconic snacking brands including Pringles potato chips. With roots dating back more than 100 years, Kellanova has a rich legacy of quality and innovation. Kellanova had 2023 Net Sales of more than USD13bn, with a presence in 180 markets and approximately 23,000 employees.
Kellanova’s portfolio complements the existing Mars portfolio, which includes billion-dollar snacking and confectionery brands. With more than 150,000 Associates across its Petcare, Snacking and Food businesses, Mars had 2023 Net Sales of more than USD50bn.
“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 honor 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,” Poul Weihrauch, CEO and Office of the President of Mars, Incorporated, said.
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 beloved brands to more consumers globally. Mars intends to apply its proven brand-building approach to further nurture and grow Kellanova’s brands, including accelerating innovation to meet evolving consumer tastes and preferences, investing locally to expand reach and introducing more better-for-you nutrition options to meet evolving consumer needs.
“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 realization of our full potential and our vision. The transaction maximizes 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,” Steve Cahillane, Chairman, President and CEO of Kellanova, added.
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.”
Transaction Advances Strategic Vision for the Future of Snacking
Accelerates ambition to double Mars Snacking in the next decade, in alignment with global consumer demand trends. The addition of Kellanova provides Mars Snacking with entry into new attractive snacking categories. It will add two new billion-dollar brands – Pringles and Cheez-It – to the Mars business, which today includes USD15bn brands. It will also expand the Mars health & wellness Snacking portfolio with the addition of new complementary products like RXBAR and NutriGrain to reflect global trends and preferences. With this transaction, Mars can extend its commitment to nourishing wellbeing through an expanded global reach and diversified product portfolio to meet evolving consumer tastes and demands.
Enhances portfolio with addition of unique, category-leading and growing brands. Kellanova’s differentiated brand portfolio is defined by uniqueness, delivering category leadership and spring-loaded platforms for future growth. The majority of Kellanova snacking brands outperform category competitors, particularly among Gen Z and Millennial consumers.
Delivers stronger, differentiated portfolio and distribution platform for priority international markets. Kellanova’s globally recognized portfolio includes beloved and growing brands with untapped potential. The combined portfolio will be well-suited to meet consumer demands for a variety of tastes and price points in fast-growing geographies, including Africa and Latin America, through complementary routes-to-market, supply chains and local operations.
Brings together world-class talent with leading brand-building experience. Both Mars and Kellanova have portfolios of some of the world’s most iconic brands, all of which have been nurtured and grown by world-class talent with deep expertise. The acquisition of Kellanova by Mars will enable each company’s talent base to take advantage of greater combined resources and professional development opportunities, given the complementary nature of the broader family of brands.
Combines complementary capabilities to unlock growth and consumer-centric innovation. The addition of Kellanova’s R&D capabilities will enable the combined business to share best practices in brand building, deliver enhanced digital capabilities, unlock complementary channel strengths and advance brand ecosystems and immersions.
Enhances positive societal impact of strong sustainability efforts. Kellanova has a long history of social and environmental leadership, including its Better Days Promise initiative, complementing the Mars Sustainable in a Generation Plan, which has delivered tangible progress, as reflected in its latest Sustainability Report, which documented strong decoupling of business growth from greenhouse gas emissions. Kellanova will also become part of the Mars Net Zero commitment and align with the Mars Responsible Marketing code.