Pringles and Pop Tarts owner Kellanova (NYSE:K) has surged in premarket trading after Mars confirmed rumours it would be purchasing the snack company for US$36 billion.
Mars, the family-owned confectionery giant, is set to pay US$83.50 a share, representing a nearly 33% premium to its market value at the start of the month when the story was first reported.
Shares in the US-listed company surged 7.5% in premarket trading, bringing its share price to close to US$80, still marginally off the offer bid.
Kellonova, which was spun out of Kellogg’s last year, is also known for brands such as Cheez-It and Grahams Crackers, as well as selling cereals like Rice Krispies and Coco-Pops internationally.
The deal is on track to be one of the biggest ever in the packaged food sector, surpassing Mars’ former purchase of Wrigley for US$23 billion in 2008.
“We believe that Kellanova (NYSE:K)’s portfolio of popular snack brands will fit well with Mars’ and help them expand scale in international markets,” said Robert Moskow, an analyst at TD Cowen.
Little regulatory pushback is expected for the deal due to the groups’ different areas of the markets, Reuters reports revealed.
Completion of the deal is scheduled to be completed in the first half of 2025.