Candy giant Mars, known for its iconic brands like Snickers, M&M’s, and Juicy Fruit, is considering a buyout of Kellanova, the snack company behind Cheez-It and Pringles, according to a recent report by Reuters.
The deal has a potential value of $27 billion and would be the largest ever in the packaged food sector. However, the talks between Mars and Kellanova are still in the early stages, and there is no guarantee that they will end up with a deal. Sources say that Kellanova might not be interested in selling itself, while several other bidders might get involved at later stages.
“Mondelez could be seen as another potential acquirer, though we view the implied leverage as a limiting factor,” D.A. Davidson analyst Brian Holland told Reuters.
Reuters’ report sent Kellanova’s shares surging by almost 19.37% early on Monday compared to the last closing price of $62.98 per share. At the current price of $75.18 per share, the company’s stock is 30.16% up year-to-date.
The packaged food sector has seen its fair share of big mergers and acquisitions lately. Food and beverage giant J.M. Smucker acquired Hostess Brands, the company behind Twinkies, for $5.8 billion, while Campbell Soup struck a $2.8 billion deal to buy Rao’s sauce owner Sovos Brands.