Mars Scores Biggest Acquisition Ever with Pringles Maker

Is there life on Mars? Well, there are definitely Pop-Tarts. Close enough, right?

Mars announced on Wednesday that it has agreed to buy snack maker Kellanova, a spin-off from Kellogg’s, for a mouth-watering $35.9 billion. 

Savory Dreams Are Made of This

The acquisition of Kellanova, which has a stable of savory snack brands such as Pringles and Cheez-Its, means Mars is diversifying its portfolio of products to be less reliant on chocolate, which has been sensitive to cost increases this year due to fluctuating cocoa prices. It’s also the biggest acquisition Mars has ever led. The next-biggest was its acquisition of Wrigley 16 years ago for $23 billion, roughly $33 billion in today’s money. To be fair, 16 years without ingesting a substantial company would leave you feeling a bit peckish.

The mega deal, the biggest of the year so far, makes up a broader trend toward M&A in the food sector:

• A May report from Oghma Partners, a corporate finance firm focused on the food industry, found that M&A in the food and drink sector had hit an eight-year high.
• Snack-makers have faced resistance from consumers pushing back on inflation in grocery aisles, increasingly sating their hangriness with cheaper store brands rather than brand-name products.

Indian Summer: What does a Gucci handbag have in common with a packet of Lays? Yes, they’re both made up of mostly air, but they’re also experiencing sluggish growth in China. Reuters reported last week that packaged goods giants including PepsiCo and Unilever are avidly trying to expand their presence in India in order to plug the gap left behind by Chinese consumers who’ve lost their appetites.