A $36 billion deal, one of the largest in the packaged food industry, brings Mars (produces M&M’s and Snickers, among others) as it decided to acquire Kellanova, a company that makes Pringles and Cheez it.

Mars will pay $83.50 per share, with the price representing a 33% premium to Kellanova’s closing stock price on Aug. 2, before Reuters first reported that a deal was in the works between Mars and the company that produces Pringles.

The company’s shares rose 8% to $80.45 in premarket trading.

All popular snacks under one roof

The U.S. packaged food industry is looking for deals to limit the impact of consumers turning to cheaper private label products due to rising prices.

Investors are also worried about a possible drop in sales due to greater consumption of weight-loss drugs such as Ozempic and Wegovy, which reduce appetite and lead to feelings of fullness.

Mars said that through the deal it plans to strengthen the snacks sector, invest locally and introduce more healthy options.

The company controls 5.4 percent of the U.S. snack market, with Kellanova controlling about 3.9 percent, according to GlobalData data, well behind market leader PepsiCo.

The size of the deal is much larger than the $23 billion acquisition of Wrigley, which brought under one roof popular snacks such as Mars’ Twix, Bounty and Milky Way chocolates, as well as Kellanova snacks such as Pop- Tarts, Rice Krispies Treats and Eggo frozen waffles.

The takeover is not expected to face many antitrust hurdles because of the limited overlap between the two companies’ products, legal experts told Reuters.

The Kellanova and Kellogg split

Kellanova will become part of Chicago-based Mars Snacking, led by Global President Andrew Clarke, after the deal closes, which is expected in the first half of 2025, the companies said.

Kellanova, which was spun off from WK Kellogg last October, has a history in salty snacks and cereal sales outside of North America. WK Kellogg stayed with the North American cereal business of Kellogg, the original parent company.

It is noted that the company recorded net sales of more than 13 billion dollars in 2023.