Confectionery king Mars could soon own Pringles maker Kellanova in a bold acquisition move – signaling a major shake-up in the snack food industry.
The Wall Street Journal, citing individuals with knowledge of the situation, said ongoing deliberations between the candy and snack giant have not been finalized, but should a deal take place, it would happen soon and mark one of the biggest for the packaged food industry this year. Moreover, a potential transaction could place Kellanova’s valuation at roughly $30 billion, including a typical deal takeover premium, the newspaper added. The company is currently valued at nearly $28 billion.
There is no guarantee that a definitive deal will happen, and other suitors, such as Oreo maker Mondelez International and chocolate giant Hershey’s, could also target Kellanova, according to Reuters.
Shares of Kellanova jumped by more than 14% during early hours on Monday, trading at $72. Kellanova, which specializes in making cereal and snacks, manufacturers household staples like Pop Tarts, Cheeze-Its crackers, and Rice Krispies Treats.
In Sept. 2023, the Kellogg Company announced its plan to split Kellanova and WK Kellogg Co. into two separate publicly traded companies. The move was made so that Kellanova could focus on global snacking and international markets, and WK Kellogg Co., could concentrate its efforts on the North American cereal business.
Talks to buy Kellanova come at time when the snack giant struggles to counteract a slowdown in sales and lagging international demand, particularly from its European consumers. According to the company’s second quarter earnings report, sales were down 4.7% when compared to the same time a year ago.
But even so, Kellanova’s biggest brand, Pringles, helped it offset the decline slightly, Steven A. Cahillane, the company’s CEO Chief told investors during the earnings call. Cahillane said that in the coming quarter the company plans to introduce Cheez-It to its European consumers with a big launch, “supported by a full arsenal of sampling, social media and advertising.”
