Mars Group hopes to boost growth in the salty snacks market by acquiring Kellanova

Nearly 36 billion dollars: this is the price paid by the American food group Mars to buy its competitor Kellanova (Pringles chips, Kellogg’s snacks). The number one in confectionery wants to double its revenues from snacking in 10 years.

The sweet giant swallows the salty one. Mars buys Pringles. Chocolate bars devour chips. The food group Mars announced on Wednesday, August 14, the acquisition of its competitor Kellanova (Pringles chips and Kellogg’s snacks), for 36 billion dollars, or 33 billion euros. This transaction, the largest at this stage for 2024, creates a snacking behemoth.

You know Mars for its chocolate bars: Twix Bounty, Snickers, not to mention M&Ms, but the food giant also has in its portfolio, Ben’s rice, Freedent and Airwave chewing gum in France, and especially pet food with brands like Royal Canin, Whiskas and Sheba. On the other hand, Kellanova was born a few months ago from the separation in two of the activities of the American Kellogg’s, with in its portfolio chips, biscuits, but also some well-known cereal brands like Special K and Frosties. Together, Mars and Kellanova represent on paper more than 63 billion dollars in annual turnover and 175,000 employees worldwide.

Mars, a century-old, ultra-secret, unlisted American family group that is worth more than Coca-Cola, wanted to buy Kellanova because the number one in confectionery wants to double its revenue from snacking in 10 years. The American group is therefore looking for different sources of growth, as it already holds more than 13% of the global market share in the confectionery sector and does not think it can make much more progress in this area. This explains this diversification, with growth expected in the salty snacking market, which is expanding more strongly than the sweet market, according to experts. Mars is thus hoping to change scale internationally and cope with the decline in its sales, at least in volume. Inflation has weighed on the group’s activities, as consumers have turned more to distributor brand products, which are significantly cheaper.

This acquisition still has to go through a number of steps, including regulatory ones. It will not be effective before 2025. The agri-food sector is in the process of consolidation, of creating mega super giants. The most expensive in history remains the merger between Kraft Foods and Heinz (ketchup), almost 10 years ago now for 45 billion dollars. Which just goes to show that junk food and snacking still have a bright future ahead of them.