EU approves Mars’ US$35.9B acquisition of Kellanova after competition probe

EU – The European Commission has granted unconditional approval for Mars’ US$35.9bn acquisition of Kellanova, concluding a comprehensive investigation into the deal first announced in August last year.  

The decision follows earlier “preliminary concerns” raised by Brussels that the merger, which would combine brands such as Snickers and Pringles, could potentially lead to higher prices for consumers across the European Economic Area (EEA). 

Six months ago, the Commission indicated that initial findings suggested the acquisition might strengthen Mars’ bargaining position with retailers.  

Regulators noted at the time that the two companies held significant influence in several product categories, heightening scrutiny of the proposed transaction.  

The deal had already secured approval from U.S. competition authorities, leaving the Commission’s verdict as the final major hurdle. 

In its official announcement, the Commission said its investigation confirmed that both companies possess notable market power in several member states. It also found that Mars, once combined with Kellanova, would be able to link a broader range of categories during negotiations with retailers.  

However, the evidence collected did not support the view that the transaction would further increase Mars’ leverage in dealings with retail partners. 

According to Brussels, adding Kellanova’s portfolio to Mars’ existing line-up would not materially boost bargaining power due to the nature of the products involved.  

The Commission noted that the items generally have long shelf lives and are purchased infrequently, reducing the likelihood of shoppers switching retailers based on brand availability.  

There was also no indication that consumers demonstrate cross-loyalty to both companies’ brands in a way that could distort competition. 

With the regulatory process now complete, Mars and Kellanova said they expect to finalise the transaction on Thursday, subject to customary closing conditions.  

The merger will see Kellanova’s well-known snacking and international cereal brands: including Pringles, Pop-Tarts, Rice Krispies, and Kellogg’s, integrated into Mars’ global portfolio, which already features Snickers, Twix, Skittles, and a range of confectionery and snack products. 

Andrew Clarke, global president of Mars, described the approval as a significant milestone and acknowledged the extensive effort behind the deal.  

He said the combined capabilities of the two businesses are expected to support future growth. Steve Cahillane, chairman, president, and CEO of Kellanova, also welcomed the development, emphasising the shared values that underpin both organisations. 

Mars’ acquisition of Kellanova, which separated from Kellogg Company in a 2023 demerger, ranks among the largest transactions in the packaged foods industry in recent years, comparable to the 2015 merger between Kraft Foods and H.J. Heinz. 

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