Mars, a family-owned global leader in pet care, snacking, and food, and Kellanova, a leading company in global snacking, international cereal and noodles, North American plant-based foods, and frozen breakfast foods, today announced that they have entered into a deal under which Mars has agreed to acquire Kellanova for $83.50 per share in cash (for a total consideration of $35.9 billion, including assumed net leverage).
This deal represents a premium of approximately 44% to Kellanova’s unaffected 30-trading day volume weighted average price and approximately 33% to Kellanova’s unaffected 52-week high as of August 2, 2024. The total consideration represents an acquisition multiple of 16.4 times LTM adjusted EBITDA as of June 29, 2024.
Kellanova is home to many iconic snacking brands, including Pringles, Cheez-It, Pop-Tarts, Rice Krispies Treats, NutriGrain and RXBAR, Kellogg’s (international), Eggo, and MorningStar Farms. With roots dating back over 100 years, Kellanova has a rich legacy of quality. Kellanova had 2023 Net Sales of more than $13 billion, 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 like SNICKERS, M&M’S, TWIX, DOVE, EXTRA, KIND, and Nature’s Bakery. Mars also has 10 pet care brands with over $1 billion in sales, including ROYAL CANIN, VCA, PEDIGREE, BANFIELD, WHISKAS, BLUEPEARL, CESAR, SHEBA, ANICURA and IAMS. With over 150,000 associates across its pet care, snack, and food businesses, Mars had 2023 net sales of more than $50 billion.
Snacking is a large and durable category that continues to grow in importance with consumers. Upon completion of the deal, Kellanova will become part of Mars Snacking, led by Global President Andrew Clarke and headquartered in Chicago. This will enable Mars to bring even more beloved brands to more consumers globally.
Mars plans to apply its proven brand-building approach to 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.
Adding Kellanova provides Mars Snacking with entry into new attractive snacking categories. And it will add two new billion-dollar brands, Pringles and Cheez-It, to the Mars business, which today includes 15 billion-dollar brands. It will also expand the Mars health & wellness Snacking portfolio by adding new complementary products like RXBAR and NutriGrain to reflect global trends and preferences. With this deal, Mars can extend its commitment to nourishing well-being through an expanded global reach and diversified product portfolio to meet evolving consumer tastes and demands.
Mars plans to fully finance the acquisition through cash-on-hand and new debt, for which commitments have been secured. This agreement has been unanimously approved by the Board of Directors of Kellanova. And the deal is subject to Kellanova shareholder approval and other customary closing conditions, including regulatory approvals, and is expected to close within the first half of next year.
Citi is serving as a financial advisor to Mars. J.P. Morgan and Citi have provided Mars with financing support for the deal. Skadden, Arps, Slate, Meagher & Flom is serving as legal advisor to Mars on the acquisition, with Simpson Thacher & Bartlett providing legal advice for the debt financing. Cravath, Swaine & Moore is serving as financing counsel to J.P. Morgan and Citi. Goldman Sachs is serving as a financial advisor to Kellanova. Lazard is serving as financial advisor to Kellanova’s Board of Directors. Kirkland & Ellis is serving as Kellanova’s legal advisor.
After the deal’s closing, Battle Creek, Michigan, will remain a core location for the combined organization.
KEY QUOTES:
“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
“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
“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.”
- Andrew Clarke, Global President of Mars Snacking
