Mars buys Pringles owner for $54b in mega snack deal

Mars Inc. agreed to buy Kellanova for nearly $US36 billion ($54.3b), bringing together two major food companies in the biggest deal of the year.

Mars will pay $US83.50 ($126.03) a share in cash for the maker of Pringles chips and Eggo waffles, the companies said in a statement on Wednesday. The price represents a premium of 33 per cent over Kellanova’s closing price on August 2 the last business day before the talks were initially reported.

The packaged-food industry has been grappling with declining volumes, slowing growth and a weakening global consumer. Companies are looking to innovation and new markets to bolster sales as shoppers start to push back on price hikes – a trend that could lead to further consolidation.

Mars’ acquisition “would be the largest packaged-food deal in nearly a decade and could spur more M&A in the sector,” wrote Bloomberg Intelligence analyst Jennifer Bartashus.

Kellanova stock has jumped 33 per cent this year through Tuesday’s close.

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