Mars Inc. is in advanced talks to acquire Kellanova, the Wall Street Journal reported, citing people familiar with the matter.
The Journal noted that including a deal premium, a deal could value Kellanova at around $30 billion and rank among the largest transactions so far this year.
Reuters reported on Sunday that sources said, “there is no certainty that Kellanova will pursue a deal with Mars,” and that “it’s possible that no deal with any party is reached.”
In 2023, Kellogg Company’s board of directors formally approved the separation of the Kellogg Company into two independent, publicly traded companies: Kellanova and WK Kellogg Co. Kellanova consists of the global snacking, international cereal and noodles, plant-based foods and North American frozen breakfast brands.
This includes brands such as Pringles, Cheez-It, Pop-Tarts, Incogmeato, Nutri-Grain and Eggo.
Inflation has caused consumers to push back on high prices for snack foods, with many food makers reporting sliding sales or slowing growth in recent quarters, reported the Journal.
“Kellanova has been among those grappling with declining sales volumes, though the company said last week its volumes returned to growth in North America in its second quarter as prices declined.
Kellanova also said it resumed investments in its brands, led by Pringles, with more coming in Cheez-It and other brands,” the Journal wrote.
In another article, Reuters noted that “A deal between family-owned Mars and Kellanova, known for snacks brands such as Rice Krispies Treats and Pop-Tarts, would be one of the biggest ever in the packaged food sector.”
“We believe that K’s portfolio of popular snack brands will fit well with Mars’ and help them expand scale in international markets,” TD Cowen analyst Robert Moskow said.
D.A. Davidson analyst Brian Holland said that “Mondelez could be seen as another potential acquirer, though we view the implied leverage as a limiting factor.”
Late last year, J.M. Smucker Company purchased Hostess Brands. The sale included the Hostess Brands sweet baked goods brands and the Voortman cookie brand.
In addition to the food brands, the transaction includes manufacturing facilities and a distribution facility in Edgerton, Kansas.
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