Mars eyes Kellanova valuing Kellogg spin off at $46b

The news: Candy giant Mars is in advanced talks to acquire cereal and snack company Kellanova in a potential deal valuing the Pringles maker at around USD30 billion ($46.30 billion), The Wall Street Journal reported citing sources familiar with the matter.

The numbers: Kellanova, maker of Pop-Tarts, Cheez-It and Pringles, was spun off from Kellogg last year at a market value of about USD22 billion. Its shares rose almost 20% after Reuters first reported the talks on Sunday.

Mars, a privately held company known for brands like Snickers and M&Ms, has recently expanded into healthier snacks, acquiring snack-bar maker Kind and Nature’s Bakery in 2020. Meanwhile, Kellanova has faced declining sales but reported growth in North America last quarter.

The context: The acquisition would be one of the largest food and beverage deals in a while and could be imminent, if talks don’t fall apart, according to the sources cited by the WSJ. The deal would also challenge regulators' tolerance to allow consolidation within the industry.