Mars to purchase Cheez-It, Pop-Tarts maker in $35.9B deal

Updated Aug. 16

McLean-based snack and pet care giant Mars announced Wednesday it has entered into a $35.9 billion, all-cash deal to purchase Kellanova, the maker of Cheez-It, Pop-Tarts, Pringles, Eggo and other food brands.

Kellanova, created in October 2023 when Kellogg split into two companies, had 2023 net sales of more than $13 billion, while the privately owned Mars had net sales of more than $50 billion, according to a news release Wednesday.

“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,” Mars CEO Poul Weihrauch said in a statement. “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. We have tremendous respect for the storied legacy that Kellanova has built and look forward to welcoming the Kellanova team.”

Kellanova will become part of the Mars Snacking division, and will be headquartered in Chicago and led by Mars Snacking Global President Andrew Clarke after the deal is completed, the statement said.

Under the agreement’s terms, Mars will acquire all outstanding equity of Kellanova for $83.50 per share in cash, and all of Kellanova’s brands, assets and operations will be included in the transaction. The acquisition is subject to Kellanova shareholders’ approval and regulatory approvals, and is expected to close within the first half of 2025, Mars said. The W.K. Kellogg Foundation Trust and the Gund Family have entered into agreements pursuant to which they have committed to vote shares representing 20.7% of Kellanova’s common stock, as of Aug. 9, in favor of the transaction.

According to Reuters, Kellanova said the closing date of the deal could be extended by up to 12 months if the two companies don’t receive the necessary regulatory approvals by next August. If the deal does not go through due to a failure to receive regulatory approval, Mars must pay $1.25 billion to Kellanova, and likewise, if Kellanova’s board changes its mind and does not support the deal, the snack maker will have to pay Mars $800 million, Reuters reported.

Mars, the maker of M&Ms, Snickers and Twix, as well as the owner of a growing pet food and pet care business, is the largest privately held company in Virginia and the fourth largest in the nation, employing about 150,000 people worldwide. Under Weihrauch, who became CEO in 2022, Mars has aimed to double its sales by 2033 and has acquired six candy and veterinary companies over the past two years. Mars Petcare veterinary care and pet foods branch accounted for about 60% of the company’s 2023 revenue, according to the company.

However, the purchase of Kellanova is the largest acquisition proposed by Mars, which has 15 brands that marked more than $1 billion each in annual sales. On Kellanova’s end, Pringles and Cheez-It both exceed $1 billion in annual sales.

In October 2023, Kellogg Co. finalized the separation of its North American cereal and snack businesses, resulting in W.K. Kellogg Co. — owner of Frosted Flakes, Rice Krispies, Corn Flakes and other cereals — and Kellanova, which includes snack food brands such as Pop-Tarts, Pringles, Nutri-Grain, Cheez-It and Eggo, as well as vegetarian brand MorningStar Farms.