One of the most popular brands is Mars, the producer of Snickers and M&M’s is allegedly acquiring Kellanova, the manufacturers of snacks Cheez-It and Pringles, for $30 billion.
This information comes from a person who is closely familiar with this deal.
Who are Mars and Kellanova?
For those who are unfamiliar, Mars is the parent company that produces and exports – ‘Snickers’ and ‘M&M’.
Kellanova is the parent company that produces and exports Snacks – Cheez-it and Pringles.
So, clearly this can also be seen as a merger of two big giants of different industries – ‘Chocolates’ and ‘Snacks’.
Why is Mars Acquiring Kellanova?
Mars, a well established family operated business famous for producing the world famous candy, is ready to spend a cost of $83.50 per share in cash for Kellanova. This acquisition, which the companies said is expected to be announced in the coming days, is Mars’ largest acquisition on record.
Kellanova’s acquisition isn’t something that’s rare. These days all the food companies have planned that, in order to survive the overbearing pressures of ‘price inflation and healthy options,’. Through the increase in the awareness of health by many individuals, snack producers such as Kellanova have struggled to make their position known. Hence, partnering with a large company such as Mars could be their key to success for this brand.
Why This Acquisition Matters
However, you might be thinking why Mars is investing so much money in this deal? However, the food industry is a very competitive sector and selling food is not an easy feat anymore especially given the rising cost of raw materials and increased awareness among consumers. In this case, merely acquiring Kellanova is about not only amplifying Mars’ snack empire but also staying relevant.
This particular deal is considered to be a giant step forward for the Mars company, especially if one compares it to the previously made $23 billion acquisition of Wrigley in 2008.
In 2008, the company attracted the largest attention with the buyout of Wrigley, the global producer of the chewing gums, worth $23 billion. This was one of the biggest takeovers in the confectionery industry at that time, and it became a turning point in the history of Mars.
Moreover, Wrigley had other popular chewing gum brands like Juicy fruit and Double mint, adding this to the Mars list of products such as chocolates and candies deepened the firm’s operational base in the global market.
What’s Next?
While Mars and Kellanova have not furnished their statement on the deal, the news around it is getting murmured. They expect this to disrupt the packaged food industry since other companies might also be planning to form similar strategies to be at par with competition.
Final Thoughts
Therefore, what does that mean for us, the snack enthusiasts? I think the snack future is even brighter from what we have today. Today, these companies are merging because one of the main reasons is – “the shift of customers to a healthy lifestyle”. So in future we may expect these companies to make a lot healthier versions of the same snacks for which they are famous for.
