Mars shakes up snack industry with $36B food merger to acquire Pringles maker

As more consumers reach for generic labels to save on money groceries, M&M's maker Mars is spending big bucks on a new acquisition to gain even more shelf space in the snack aisle.

The candy bar giant, known for brands such as Snickers and Twix, is gearing up to purchase global snacking company Kellanova in an all-cash deal valued at $35.9 billion, which will add well-known packaged foods like Eggo, Pop-Tarts and Pringles to its portfolio.

The family-owned, Virginia-based company announced the deal with the multinational food manufacturer -- formerly known as the Kellogg Company -- in joint press releases on Wednesday, marking one of the largest CPG mergers in years.

What to know about the Mars deal with Kellanova adding snacks, frozen foods and more to its candy business

"Mars will acquire all outstanding equity of Kellanova for $83.50 per share in cash," the release stated. "All of Kellanova's brands, assets and operations, including its snacking brands, portfolio of international cereal and noodles, North American plant-based foods and frozen breakfast are included in the transaction."

The deal is expected to close in the first half of next year. Upon completion, Kellanova will become part of Mars Snacking, which is led by Global President Andrew Clarke.

Kellanova, which was spun off from the Kellogg Co. last fall when it officially split up into two different companies, also includes other popular consumer brands such as Cheez-Its, Rice Krispies Treats, MorningStar Farms, NutriGrain and RXBAR. The Chicago-based company reported more than $13 billion in net sales in 2023.

Privately owned Mars, which also has a pet food and veterinary care arm in addition to its confectionery business, previously expanded its scope beyond sweets when it bought healthy snack brand KIND North America for $5 billion in 2020.

Poul Weihrauch, CEO of Mars, Inc. called the forthcoming deal "a substantial opportunity for Mars 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," his statement continued.

Steve Cahillane, chairman, president and CEO of Kellanova, added that the "historic combination" of companies was both a "cultural and strategic fit."

Boasting the "attractive purchase price" of the all-cash transaction, Cahillane said the move "creates new and exciting opportunities for our employees, customers, and suppliers," stating he's "confident Mars is a natural home for the Kellanova brands and employees."

The sweet-meets-salty food merger resembles a similar strategy from competitor The Hershey Company, which added SkinnyPop with the $1.6 billion buyout of Amplify Snack Brands Inc. in 2017, followed by Dot's Pretzels in 2021.