Deal Street: Kellanova Among Top Trending Stocks After Mars Acquires Pringles-Maker for $35.9 Billion

Snickers-maker Mars said on Wednesday it will acquire Pringles-maker Kellanova for $83.50 per share in cash, for a total consideration of $35.9 billion, including assumed net leverage. The agreement has been unanimously approved by the Board of Directors of Kellanova.

Following the announcement, shares of Kellanova soared over 7% to $80.10 in Wednesday’s pre-market session. Stocktwits users appear undecided on the fate of the stock following the news, with the sentiment meter dipping into ‘neutral’ territory (50/100) from ‘bullish’ a day ago.

Mars stated the transaction price represents a premium of approximately 44% to Kellanova’s unaffected 30-trading day volume weighted average price.

Andrew Clarke, Global President of Mars Snacking said, “The Kellanova brands significantly expand our Snacking platform, allowing us to even more effectively meet consumer needs and drive profitable business growth.”

After the deal closes, Battle Creek, Michigan will remain a core location for the combined organization, the firm said.

Mars said all of Kellanova’s brands, assets and operations, including its snacking brands, portfolio of international cereal and noodles, North American plant-based foods and frozen breakfast are included in the transaction. The firm intends to fully finance the acquisition through a combination of cash-on-hand and new debt, for which commitments have been secured.

Wednesday’s announcement confirms last week’s media reports that indicated a potential acquisition is in the offing. In October 2023, Kellogg Company completed the separation of its North American cereal business through a tax-free spin-off of WK Kellogg Co to Kellogg Company shareholders. Following the separation, Kellogg Company changed its name to Kellanova. Both companies trade on the NYSE.

During the second quarter, Kellanova reported revenues of $3.19 billion versus an estimate of $3.15 billion. Earnings per share came in at $1 compared to an estimate of $0.90. Kellanova also raised its full-year guidance.

Meanwhile, some Stocktwits users have expressed optimism on the Mars deal while others are yet to be convinced.