Less than a year after it was spun off by Kellogg Co., Chicago-based Kellanova is set to be acquired by Mars, the companies announced Wednesday.
Mars will buy Kellanova in a deal worth nearly $36 billion. The transaction is expected to close during the first half of 2025.
The deal will bring Mars, the maker of Skittles and M&Ms, a portfolio of household-name snack brands including Cheez-It, Pop-Tarts and Rice Krispies Treats. Kellanova’s portfolio also includes plant-based brand MorningStar Farms, which Kellogg had initially planned to spin off into a separate third company but kept amid declining sales.
Kellanova is headquartered in Chicago, with offices at 412 N. Wells St. in River North.
Mars Snacking is headquartered in Chicago, and Mars Snacking Global President Andrew Clarke will lead the companies after the transaction closes.
“The Kellanova brands significantly expand our Snacking platform, allowing us to even more effectively meet consumer needs and drive profitable business growth,” Clarke said in a statement Wednesday.
The deal may have been prompted in part by waning growth in the packaged foods industry, said Erin Lash, director of consumer equity research for Morningstar. That decline in growth, which follows a boom in demand during the pandemic, has been accompanied by consumers who have pulled back because of higher prices and broader financial constraints, she said.
“Volumes have come under pressure or have started to stagnate,” Lash said.
Lash said the deal is not likely to be held up by antitrust concerns, noting a lack of significant category overlap between the two companies.
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But will consumers see new salty-sweet snacks born of product combinations from the two companies’ portfolios? That’s possible, Lash said, noting chocolate giant Hershey’s introduced Reese’s Popcorn after it acquired SkinnyPop.
Kellanova did not provide details about the impact of the impending merger on Chicago offices and employment.
