(Ad Age) - Mars, the US confectionery company, is considering buying snacks maker Kellanova, according to people familiar with the matter, in what could be one of the biggest deals in the consumer industry this year.
Considerations on the deal are ongoing and no final decision has yet been made, said the people, who asked not to be identified.
The acquisition of Kellanova, which was spun off from Kellogg Co. last year, would give Mars brands like Pringles, Cheez-It and Pop-Tarts and help it fight declining vk phone number data spending from weaker consumers. As inflation slows, companies that raised prices during the pandemic are finding it harder to cover the drop in purchases with higher prices.
Kellanova shares rose 14% in early New York trading. They have gained 13% this year, valuing the company at $21.6 billion. By comparison, the S&P 500 is up 12%.
"At times like these, when growth is slowing, balance sheets are relatively healthy and valuations are falling, food market leaders tend to look more toward large combinations to drive cost synergies," TD Cowen analyst Robert Moskow wrote in a note Monday.
Moskow said Kellanova's popular snacks should fit well with Mars' brands and help them expand their scale in international markets.
Representatives for Mars and Kellanova did not immediately respond to requests for comment.
Kellogg's last year separated its snacks business from its North American cereal operations, which include brands such as Special K and Corn Flakes.
Mars has brands including Snickers, M&M'S, Skittles and Ben's Original, as well as pet care brands such as Pedigree and Whiskas. Earlier this year, it acquired premium chocolate brand Hotel Chocolat.
