Mars US$36 billion Kellanova deal waved ahead by US regulator

Mars’ US$36 billion takeover of snack maker Kellanova was given the green light by the US Federal Trade Commission (FTC) on the same day European Union regulators opened up a lengthy probe of the deal.

The head of antitrust enforcement at the Washington-based agency said a review of the deal found that it “does not meet the standard for an anticompetitive merger”.

“Commission staff closely reviewed every aspect of this transaction, including both specific product markets and potential portfolio effects from the acquisition,” Daniel Guarnera said on Wednesday (Jun 25). “They turned over every stone needed to arrive at a robust assessment of the likely competitive effects of this transaction.”

Earlier in the day, the European Union opened an in-depth investigation over concerns that the largest packaged-food deal in almost a decade could thwart competition. In the takeover, Mars, known for its chocolate, will get a number of snack brands, including Pringles chips.

The deal will allow Mars to add “several very popular brands of potato chips and cereals to its already broad and strong product portfolio”, the EU’s antitrust chief Teresa Ribera said. The probe “will assess the transaction’s impact on the price of these companies’ products for consumers”.

The companies have now secured regulatory approval in 27 out of 28 jurisdictions with no asset sales or other changes to their business, and expect to close the deal “towards the end of 2025”, Mars chief executive officer Poul Weihrauch said in a statement.

Announced last August, the deal will help closely held Mars diversify its chocolate-heavy portfolio away from cocoa, whose prices have risen to historic levels. Kellanova itself has fared better than most of its competitors with a string of strong earnings since it spun off its cereal business as WK Kellogg.

In his statement, Guarnera said the companies sell different products in other countries, including breakfast cereal sold by Kellanova in Europe that it does not sell in the US.

“The Trump-Vance FTC takes an America First approach to antitrust enforcement,” Guarnera said. “Our job is to determine whether there is a violation of American law that we can prove in court. And once we have concluded there is not, our job is to get out of the way.” BLOOMBERG