Snickers maker Mars explores acquisition of Kellanova, sources say

WK Kellogg Co

04/08/2024 19:59

(Repeats with no change to headline or text)
    By Anirban Sen
       Aug 4 (Reuters) - Family-owned food giant Mars, whose
candy brands include M&M's and Snickers, is exploring a
potential acquisition of Kellanova  K.N , maker of snacks such
as Cheez-It and Pringles, according to people familiar with the
matter. 
A deal would be one of the biggest ever in the packaged food
sector, given Kellanova's market value of $22 billion, and test
the appetite of U.S. regulators to allow consolidation in the
sector. 
    Shares of Kellanova are up about 20% since it was spun off
from Kellogg Co  KLG.N  last October but are still trading at a
discount to some of its peers, such as Hershey  HSY.N  and
Mondelez International  MDLZ.O , making it a potential
acquisition target. 
    There is no certainty that Kellanova will engage and pursue
a deal with Mars, the sources said. Another suitor could also
approach Kellanova, and it's possible that no deal with any
party is reached, the sources added, requesting anonymity
because the matter is confidential.
    Kellanova declined to comment, while spokespeople for Mars
did not immediately respond to requests for comment.
Dealmaking in the packaged food sector has been robust as
companies seek scale to weather the impact of price inflation
and drug-loss drugs weighing on demand. But many of the deals
have been smaller than the mega merger between Heinz and Kraft
clinched almost a decade ago, as U.S. antitrust regulators have
become more concerned about the impact of large deals on
consumers. 
    Kellanova focuses on snacks, such as crackers, toaster
pastries and cereal bars, as well as convenience foods such as
ready-to-eat cereals, frozen waffles, veggie foods and noodles.
It makes its products in 21 countries and markets them in more
than 180 countries. 
    A family-owned business, Mars' consumer products include
snacks and pet food. It also runs veterinary care centers and
has a veterinary diagnostics business .

(Reporting by Anirban Sen in New York
Additional reporting by Abigail Summerville in New York; editing
by Diane Craft)
((mailto:Anirban.Sen@thomsonreuters.com; Twitter: @asenjourno;
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