Mars–Kellanova deal on hold in Europe despite US anti-trust approval
Retailers believe such high market shares give large suppliers the power to impose restrictions and practices that are damaging to retailers.
EUROPE – The European Commission has paused its investigation into Mars’ US$36 billion acquisition of Kellanova as it awaits data requested from the companies.
The Commission acts as the antitrust watchdog for the EU, aiming to ensure fair competition.
It opened a full-scale investigation into the acquisition deal in June, warning of resultant price increases due to Mars’ enhanced negotiating power with retailers and the brand’s high market share.
Mars’ acquisition of Kellanova was announced in 2024 and is set to be the biggest acquisition yet for the snack company following its earlier acquisition of Wrigleys, which Mars bought in 2008 for US$23 billion.
The Kellanova deal would bring a range of huge household brands such as Pop Tarts, Rice Krispies, Twix and Bounty, under the same ownership.
Reuters reported that European retailers have voiced concerns about the merger, citing the “power of large international suppliers of branded packaged goods and the high concentration levels in products such as breakfast cereals, carbonated drinks, confectionery and frozen desserts.”
It added that retailers believe such high market shares give large suppliers the power to impose restrictions and practices that are damaging to retailers.
In an email to Reuters, the commission said: “The ‘clock’ in merger investigations can be suspended if the parties fail to provide, in a timely fashion, an important piece of information that the Commission has requested from them within a prescribed deadline”.
This development comes after the proposed acquisition was approved by the US Federal Trade Commission (FTC).
Daniel Guarnera, director of the Bureau of Competition, noted that the commission’s investigation included data analysis, sworn testimonies and the review of hundreds of thousands of documents.
Ultimately, the FTC concluded that there was no violation of US antitrust laws, thereby allowing the transaction to proceed without any restrictions.
However, under EU merger regulations, the acquisition still must be approved by the Commission before it is completed.
The investigation will reportedly now resume with a new decision deadline once the relevant information has been submitted, extended from 31 October previously.
Both Mars and Kellanova are optimistic about the potential benefits of the merger, which they believe could lead to improved product innovation and expanded market reach.
Sign up HERE to receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.
