Kellogg’s is selling it’s snack business — including Cheez-It, Pop-Tarts — in $36B deal

BATTLE CREEK, MI — Kellogg’s is offloading its iconic snack food brands in a massive acquisition announced on Wednesday, Aug. 14.

Mars Inc., the maker of Snickers, M&Ms and many other snack foods, announced it plans to buy the snacking arm of Kellogg — called Kellanova.

Mars is purchasing all outstanding equity of Kellanova for $83.50 per share in cash. The total value of the transaction is $35.9 billion, including debt, according to documents released by Mars.

Kellanova produces famous snack brands including Pringles, Cheez-It, Pop-Tarts, Rice Krispies Treats, NutriGrain and RXBAR. Other brands include Eggo and MorningStar Farms.

Kellanova had 2023 net sales of more than $13 billion, with a presence in 180 markets and approximately 23,000 employees, Mars said.

Mars’ family of brands includes Snickers, M&M’s, Twix, Dove, Extra, Kind, Nature’s Bakery, as well as pet brands including Pedigree, Whiskas, Cesar and Iams.

Mars had 2023 net sales of more than $50 billion, the company said.

Kellanova will become part of Mars Snacking, led by Global President Andrew Clarke and headquartered in Chicago.

After the transaction closes, Battle Creek will remain a core location for the combined Mars/Kellanova organization, Mars said.

The Battle Creek-headquartered Kellogg Company announced in June 2022 it would split into three companies and part of the headquarters for one of the new businesses would move to Chicago.

Kellogg Company announced in 2023 the creation of two new entities — WK Kellogg Co. would focus on cereal and Kellanova would focus on snacks.

Kellanova would maintain dual campuses in Battle Creek and Chicago, with its corporate headquarters located in Chicago, the company said in 2023.

Kellogg is holding onto its cereal business — WK Kellogg Co. — which is still headquartered in Battle Creek.

The employees of Mars have tremendous respect for the “storied legacy” that Kellanova has built and they look forward to welcoming the Kellanova team, said Poul Weihrauch, CEO and Office of the President of Mars.

“In welcoming Kellanova’s portfolio of growing global brands, we have a substantial opportunity for Mars to further develop a sustainable snacking business that is fit for the future,” Weihrauch said. “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.

Steve Cahillane, chairman, president and CEO of Kellanova, called it a historic combination.

“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,” Cahillane said.

This deal creates new opportunities for employees, customers and suppliers, Cahillane said.

“We are excited for Kellanova’s next chapter as part of Mars, which will bring together both companies’ world-class talent and capabilities and our shared commitment to helping our communities thrive,” Cahillane said. “With a proven track record of successfully and sustainably nurturing and growing acquired businesses, we are confident Mars is a natural home for the Kellanova brands and employees.”

McLean, Virginia-based Mars is one of the largest privately held companies in the U.S., according to the Associated Press.

The agreement has been unanimously approved by the Kellanova’s Board of Directors of Kellanova. It’s subject to Kellanova shareholder approval and other customary closing conditions, including regulatory approvals. The deal is is expected to close within the first half of 2025.

Arun Sundaram, an analyst with investment research company CFRA, said the combination would be “a good marriage.” Sundaram said in an Associated Press report he expects U.S. anti-trust regulators will ultimately approve the deal because there is little overlap between the two companies’ portfolios.

Mars and Kellanova together would control about 8% of the U.S. snack market, Randal Kenworthy, a senior partner specializing in consumer products, told the AP. PepsiCo, owner of Frito-Lay, has a 9% share.

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