Confectionery and snack giant Mars has received final regulatory approval from the European Commission (EC) on 8 December for its US$36bn acquisition of global snacking business Kellanova.
Following the EC’s approval, which was subject to closing conditions, the two companies expected to close the deal on 11 December, Mars said on 8 December.
Kellanova resulted from the split of the old Kellogg Company, completed in October 2023.
Kellogg’s split also resulted in the formation of North American cereal business WK Kellogg, which Italian chocolate and confectionery giant Ferrero acquired for US$3.1bn in September.
On completion, Mars said Kellanova’s portfolio of snacking brands, which included Pringles, Cheez-It, Pop-Tarts, Rice Krispies Treats, RXBAR and Kellogg’s international cereal brands, would join the existing Mars Snacking portfolio, which included brands like Snickers, M&M’S, Twix, Skittles, EXTRA and KIND.
“Mars Snacking and Kellanova will be better together, building on the strength of our respective legacies and capabilities to unlock new possibilities and drive growth,” said Andrew Clarke, global president of Mars Snacking.
Following the close of the pending transaction, Mars said it expected the combined snacking business to generate around US$36bn/year, with a portfolio that included brands worth US$9bn.
Mars Snacking would continue to be headquartered in Chicago, Illinois, and would operate in more than 145 markets, with 80 global production facilities and more than 170 retail outlets like Hotel Chocolat and M&M’S World, the company said.
The parties announced on 14 August 2024 that they had entered into a definitive agreement under which Mars agreed to acquire Kellanova and the pending transaction received Kellanova shareowner approval on 1 November 2024.
The deal was given the all-clear by the US Federal Trade Commission in June but the EU opened a full-scale investigation that month, concerned that Mars’ increased portfolio and bargaining power with retailers might lead to higher prices for consumers or reduce competition.
However, the EC found insufficient legal grounds to demand concessions, according to sources quoted in a 7 October Reuters’ report.
A combined Mars and Kellanova would account for around 12% of the US snacking and confectionery industry, according to market share data from NielsenIQ.
When first announcing the split, Kellogg’s said the move would drive growth for both companies and this was likely to include the acquisition of new brands.
At that time, Kellogg’s said it expected two distinct corporate cultures to emerge, with decisions at Kellanova driven by the fact that it was an international snacks business.
In addition to its snacking portfolio, Mars offers a range of pet care products including Pedigree, Royal Canin and Whiskas.
