Mars Is Getting Salty As They Eye Pringles In $30 Billion Deal

Mars, the candy titan behind M&Ms and Snickers, is eyeing a mega-deal that could reshape the snack aisle as we know it. The chatter on Wall Street is that Mars is looking to buy Kellanova, the company that brings you Pringles, Pop-Tarts, and Cheez-Its. Yeah, before long Snickers and Pringles could soon be under one roof. This potential acquisition sent Kellanova’s stock soaring 16% and brought new meaning to the slogan “once you pop, the fun don’t stop”.

Here’s the thing. If Mars pulls the trigger, this deal could value Kellanova at $30 billion. That’s a solid $8 billion above Kellanova’s current market cap. For context, this would be one of the largest deals ever in the packaged food industry. And Mars isn’t new to big buys; they’ve got a history of throwing down serious cash to grow. Remember their $23 billion acquisition of Wm Wrigley Jr. back in 2008? You know, the gum that has no flavor after 5 minutes. Or the $9.1 billion they spent on petcare giant VCA in 2017? 

(Source: New York Times)

So why is Mars making this savory play? With cocoa prices hitting record highs, it seems Mars is looking to diversify. By adding Kellanova’s salty snacks to their portfolio, Mars can hedge against the volatile cocoa market. Plus, with snacks like Pringles and Cheez-Its in their lineup, they’re not just playing in the candy aisle anymore—they’re taking over the whole dang grocery store.

In case you’re scratching your head wondering what the heck Kellanova is, I’ll get you up to speed. Kelloggs, the cereal titan, decided to split into two last year. The cereal business now falls under WK Kellogg, while the snacks biz became Kellanova. It’s like when Destiny’s Child broke up, and suddenly Beyoncé was everywhere. Kellanova’s got all the snacks we love, and now it’s ready for its solo tour. 

(Source: WWMT)

This isn’t just a Mars thing. The packaged food industry has been on a bit of a shopping spree. Last year, J.M. Smucker, the folks behind Jif peanut butter, announced they were buying Hostess for $5.6 billion. It’s like everyone’s trying to get a bigger piece of the snack pie. According to Robert Moskow, an analyst at TD Cowen, we could be entering another cycle of big food industry consolidations, similar to when General Mills bought Pillsbury and Kraft nabbed Nabisco around the same time all the Y2K drama was going around.

Let’s not forget why snacks are so hot right now. During the pandemic, we all turned into snack monsters, hoarding treats like there was no tomorrow. But, now that we’re back to normal and inflation squeezes our wallets, we’re seeing a shift. People are cutting back on pricey name-brand snacks. Even Mondelez, the maker of Oreos, reported a dip in sales last quarter. Kellanova, however, seems to be holding its own, raising its full-year sales forecast after beating expectations in its latest earnings report.

(Source: simplywall)

If this deal goes through, Mars will be piling up one of the tastiest portfolios in the snack world. It’s a move that could shake a very competitive industry, forcing other big players to reconsider their game plans. And for us, the snack-loving public? Well, it just means more delicious options under one mega-brand. And I guess the next time I find myself in a snack food binge— eating snickers and pringles—at least I’ll know they’re on the same team. 

Stocks.News holds positions in Kellanova, General Mills, and Mond