(Times of Update) — Mars Inc. has agreed to buy Kellanova for nearly $36 billion, bringing together two major food companies in one of the biggest deals of the year.
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Mars will pay $83.50 per share in cash for the maker of Pringles chips and Eggo waffles, the companies said in a statement.
Kellanova shares rose 7.9% in premarket trading in New York.
The food industry is facing declining volumes, slowing growth and weakening global consumption. Companies are looking to innovation and new markets to boost sales as consumers begin to resist price increases.
Kellanova has been doing better than most of its competitors, with a string of strong results since spinning off its cereal business as W.K. Kellogg Co. late last year. Earlier this month, Kellanova raised its full-year forecast as new products and marketing efforts boosted sales in the second quarter.
For Mars, the acquisition of Kellanova would diversify its portfolio of chocolate-heavy stocks away from cocoa, whose prices have reached record highs this year. Kellanova would also help Mars expand into international markets.
Analysts said a merger between Mars and Kellanova would not raise major antitrust concerns because of the limited overlap between the two companies’ products.
–With assistance from Peter Vercoe.
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