Mars recently announced its acquisition of snack-maker Kellanova for $35.9 billion, which includes taking on Kellanova’s net debt. This move will add Pringles and Cheez-It to Mars’s portfolio, alongside brands like M&M’s, Snickers, and Pedigree pet food. The deal represents a 33% premium to Kellanova’s stock price on August 2, prior to the initial reports of the potential acquisition.
Mars plans to finance the acquisition using a $29 billion bridge loan, in addition to its cash reserves. With the combined net sales of both companies exceeding $50 billion, the acquisition aims to round out Mars’s chocolate-heavy portfolio with a broader range of snacks.
However, the acquisition faces potential challenges, including securing regulatory approval. Antitrust enforcers have the authority to extend the review period up to two years, leading to uncertainty regarding the deal’s completion. Despite these potential hurdles, Kellanova’s shares surged over $80 following the announcement, suggesting confidence in the success of the acquisition.
Overall, the acquisition represents a significant move for Mars as it seeks to expand its snack offerings and solidify its position in the market.