Mars is reportedly eyeing up an acquisition of Kellanova, the US snacks business spun off from US cereal giant Kellogg last year.
According to Reuters’ sources, the Kind snacks and M&M’s confectionery brand owner, which is also headquartered in the US, is ‘exploring a potential’ deal for Kellanova, the news agency said yesterday (4 August).
However, the unnamed sources said ‘there is no certainty’ that Mars will ‘pursue’ an acquisition of Kellanova. They added that ‘another suitor could also approach Kellanova’, although there is no certainty a deal could be reached with any party.
Just Food has asked both Mars and Kellanova for comment on the speculation. Reuters reported that Kellanova had declined to comment, while Mars had not responded to a request.
Privately-owned Mars is no stranger to M&A, striking a number of recent acquisitions, along with deals in the pet-food segment in which Kellanova does not have a presence.
Mars snapped up California-based ready meals and sauces maker Kevin’s Natural Foods last year reportedly for a price tag of $800m. In 2022, it bought chocolate covered fruit snacks business Trü Frü in Utah for an undisclosed sum.
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Nature’s Bakery in Missouri was added to the roster in 2020, with Mars paying $400m for the plant-based snack bars business. That deal was struck through Kind, another snacks maker in which Mars took full control of in 2020.
As a private company, Mars does not generally reveal its financial figures. However, in 2022 the Snickers and Skittles brand owner said, as it announced a CEO changeover, that it generates almost $45bn in net sales.
Kellanova, meanwhile, posted $13bn in sales last year. Since the split with Kellogg, the business is centred on snacks, frozen foods, noodles, and cereals outside of North America. The latter is now managed by WK Kellogg, the other entity to emerge from the group spin-off.
Last week, the producer of the snack brands Pringles, Cheez-It, RXBar and Pop-Tarts raised its organic sales estimate for the year to 3.5% or more, from 3% previously.
Second-quarter sales growth to 29 June was 4%, delivering $3.46bn in organic sales. Year to date, sales were up 4.7% at $6.96bn.
Adjusted operating profit increased 13.3% to $502m for the quarter and climbed 19.2% through the first half to $1.01bn.
Adjusted EPS rose 12.2% to $1.01 over the three months, and was up 20.2% year to date at $2.02.
Should a deal between Mars and Kellanova materialise, it would mark a second significant transaction in the US food arena in little more than six months.
In the back half of last year, JM Smucker struck a deal to acquire fellow US food manufacturer Hostess Brands for around $5.6bn.
