Mars, one of the world’s biggest companies, is reportedly eyeing an acquisition of Kellogg spin-off Kellanova.
Talk of Mars’ potential acquisition saw shares of Kellanova rise by 16 per cent during early trading on Monday after Reuters reported that Mars was considering a takeover of the US$27 billion company.
Although, according to Reuters’ confidential source “there is no certainty that Kellanova will pursue a deal with Mars” and that “another suitor could also approach Kellanova, and it’s possible that no deal with any party is reached”.
Given Kellanova’s current market value of US$27 billion, the acquisition would not only be Mars’ biggest ever, but one of the biggest ever in the packaged food sector and would help Mars bolster its position in the salty snack market.
Since splitting from WK Kellogg last October to focus on snacks and other foods, Kellanova shares have risen but are still trading at less than some of its peers such as Mondelēz International and Hershey, making it an attractive acquisition target.
Kellanova currently makes its products in 21 countries and markets them in over 180 countries, with brands in Australia including Pringles, Nutri-Grain, Pop-Tarts, and LCMs. Mars has a number of brands in Australia, spanning the confectionery, food, and pet care categories.
Any acquisition would be closely looked at by regulatory bodies such as the ACCC and America’s Federal Trade Commission, given recent concerns about market monopolies and reduced competition.
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