Mars to buy Pringles-maker Kellanova in $54b snacking deal
Make us a preferred source
Make us a preferred source on Google
The news: Mars has agreed to acquire Pringles-maker Kellanova for nearly USD36 billion ($54.46 billion), including debt, in the largest packaged-food deal in nearly a decade and the year’s biggest.
The numbers: In a statement, Mars said it will pay USD83.50 per share in cash, representing a 33% premium over Kellanova’s closing price (a 1-year record high) on Friday 2 August. That was before the deal talks were first reported by media over that weekend.
Kellanova CEO Steve Cahillane told CNBC in an interview that he doesn’t expect antitrust concerns from regulators regarding the deal, although there is a USD1.2 billion termination fee payable by Mars if the deal fails to gain regulatory approval.
The acquisition will be financed through Mars’ cash reserves and a USD29 billion bridge loan arranged by Mars’ adviser on the deal, Citi, and JPMorgan. Goldman Sachs and Lazard advised Kellanova.
The context: Kellanova was spun off from Kellogg last year at a market value of about USD22 billion.
The acquisition will grow Mars' snacking portfolio with well-known brands such as Pringles, Pop-Tarts and Cheez-It.
The deal is subject to regulatory and Kellanova shareholder approval. Major Kellanova shareholders, the WK Kellog Foundation Trust and the Gund Family, have already agreed to vote their 20.7% stake in favour of the deal.
What they said: “This is a truly historic combination with a compelling cultural and strategic fit. Kellanova has been on a transformation journey to become the world’s best snacking company, and this opportunity to join Mars enables us to accelerate the realization of our full potential and our vision,” said Cahillane, who will depart the company after the deal closes next year.
Mars CEO Paul Weihrauch said Mars had an opportunity “to further develop a sustainable snacking business that is fit for the future. We will honor the heritage and innovation behind Kellanova’s incredible snacking and food brands while combining our respective strengths to deliver more choice and innovation to consumers and customers.”
The sources: Mars statement, Kellanova statement, Bloomberg , The Wall Street Journal
