Mars-Kellanova Deal Gets U.S. Green Light, Yellow Caution in Europe
Dear Mars & Kellanova, there’s good news and bad news. The good news is U.S. regulators have cleared your merger. The bad news is European authorities have decided to take a harder look at it.
On the same day (June 25) that the U.S. Federal Trade Commission (FTC) concluded its antitrust review of Mars’ pending acquisition of Kellanova, the European Commission reportedly has initiated a “Phase II investigation,” meaning it’s undertaking a more detailed assessment of the deal than expected. June 25 was the original date European Union approval was expected, according to European media.
“Based on the current status of the ongoing antitrust review by the European Commission, Mars and Kellanova expect the transaction to close towards the end of 2025, subject to customary closing conditions,” said the Mars website. “The exact timing cannot be predicted with any certainty at this point.”
On both sides of the Atlantic, regulators were concerned about the sudden concentration of snack brands under Mars ownership, which is privately owned by the Mars family. Mars’ snack products are largely limited to candy, gum and bars, but it has billions of dollars in those categories.
Add Kellanova’s $13 billion in true snacks (from Pop-Tarts to Pringles), and factoring in Mars’ $50 billion (estimated) overall global sales, and the sudden global snack powerhouse could exert quite a lot of leverage over EU grocers – and raise prices for consumers.
In mergers of this type and size, regulators could demand that some assets be sold off.
Mars is paying $36 billion for the snack and international half of the former Kellogg Co. It originally hoped to consummate the deal by now.
“We are very pleased that the FTC has completed its review of the transaction without the imposition of any condition or requiring any remedy,” said Poul Weihrauch, CEO & Office of the President at Mars Inc. “The transaction has now received all but one of the 28 required regulatory clearances, with only the review by the European Commission outstanding.”
Steve Cahillane, chairman, president & CEO of Kellanova, added: “This represents a significant milestone on our path to combine Mars Snacking and Kellanova. We continue to believe this is an exciting opportunity to create a broader, global snacking business that is better positioned to meet evolving consumer needs and preferences.”
