Mars, the chocolate to pet food group, has struck a $36bn (£28bn) deal to buy Kellanova, the maker of Pringles and Pop-Tarts.
The all-cash offer, announced on Wednesday, is the biggest ever acquisition for the privately owned Mars, dwarfing its $23bn takeover of the chewing gum maker Wrigley in 2008.
The deal could attract scrutiny from competition watchdogs as it brings together well-known consumer goods brands including Mars’ Twix, Bounty and Milky Way with Kellanova’s Pringles, Special K cereal and Carr’s water biscuits.
However, experts have said that the limited overlap between the two companies’ products means the deal is likely to be given the green light.
Poul Weihrauch, the chief executive of Mars, said: “In welcoming Kellanova’s portfolio of growing global brands, we have a substantial opportunity for Mars to further develop a sustainable snacking business that is fit for the future.
“We will honour the heritage and innovation behind Kellanova’s incredible snacking and food brands while combining our respective strengths to deliver more choice and innovation to consumers and customers.”
Mars said the deal, which is subject to approval by Kellanova’s shareholders and regulators, expanded its portfolio of health and wellness-linked brands with appeal to younger consumers and helped meet demands in fast-growing markets such as Africa and Latin America.
Kellanova has about 23,000 employees and books annual sales of $13bn across 180 international markets.
Steve Cahillane, the president and chief executive of Kellanova, said: “This is a truly historic combination with a compelling cultural and strategic fit.”
The WK Kellogg Foundation Trust and longstanding shareholders the Gund family have committed to vote shares representing almost 21% of Kellanova’s stock in favour of the deal.
It comes as food brands look for ways to gain scale or cut costs. This is to help offset the impact of inflation and global government action to control the marketing of high fat, salt and sugar snacks, as well as the expected hit on demand because of the increasing popularity of weight-loss drugs.
Kellanova helps Mars diversify its chocolate-heavy portfolio of brands, which are seen as more vulnerable to falling demand, with savoury snacks and treats with a healthier image, such as NutriGrain, while giving it more exposure to international markets.
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Brands have come under pressure as consumers have switched to supermarket own-labels or cheaper options amid the rising cost of household energy bills, mortgages and other essentials.
Kellanova was split off from WK Kellogg Co last October. It sells snacks in the US and around the world, and cereals including Corn Flakes, Frosties and Rice Krispies outside North America.
The original parent company, WK Kellogg, was left with its North American cereal business, including brands such as Froot Loops and Raisin bran.
Mars, which is based in McLean, Virginia, was founded by Frank C Mars, who started making and selling butter cream candy from his kitchen in Tacoma, Washington, in 1911. The now global business had $47bn in annual sales in 2022.