Mars is buying the maker of Pringles and Cheez-It for almost $36 billion

• Mars is buying Kellanova for almost $36 billion, making it one of the largest deals this year.
• Kellanova's big business is salty snacks including Pringles and Cheez-It.
• Mars was the "most logical" buyer given its minimal product overlap, analysts wrote.

Mars is buying food maker Kellanova for almost $36 billion, including debt, in one of the year's biggest deals, the companies said Wednesday.

Mars is paying $83.50 a share in cash — a 44% premium on Kellanova's 30-day trading average. In early August, Reuters reported that the companies were in late-stage talks.

The acquisition brings brands like Pop-Tarts, Eggo waffles, and Pringles under the Mars umbrella, which includes candies, like M&Ms and Snickers, snacks, and pet food.

The recent spin-off from Kellogg's will boost Mars' sales of salty snacks, which accounted for nearly half of Kellanova's annual revenue last year, per Reuters.

The deal gives Mars two more billion-dollar brands — Pringles and Cheez-It to add to the 15 it already owns.

The family-owned snacking, food, and pet care company has annual sales of $50 billion from brands including Ben's Original, Cesar, Dove, Pedigree, Royal Canin, and Whiskas.

Kellanova and WK Kellogg Co were created in October last year after the Kellogg Company spilt into two listed companies. Kellanova had sales of $23 billion in 2023.

Mars was the "most logical acquirer" for Kellanova given their minimal overlap, analysts from Jefferies wrote in a note earlier this month. That could help secure regulatory approval, as the Biden administration continues to scrutinize mergers with antitrust concerns.

The acquisition significantly broadens Mars' presence in the snacking sector, pushing the company into new categories such as chips and crackers, where Kellanova holds strong market positions with its Pringles and Cheez-It brands.

Mars also recently stepped up efforts to grow its snack portfolio, following acquisitions of snack-bar maker Kind's North America business and Nature's Bakery.

The deal may spur other mergers in the sector, with a possibility for "more activist investor interest in pushing for further consolidation across the packaged food space," Alexia Howard, an analyst at AllianceBernstein, told GlobalData.