- The FTC granted early termination of its review, stating that the transaction does not meet the standard for an anticompetitive merger.
- The EU's investigation will assess the impact of the deal on product prices and Mars' bargaining power against retailers in the bloc.
- The acquisition would bring popular brands like Pringles and Cheez-It into Mars' snacks portfolio, aiming to meet demand in fast-growing markets.
The US Federal Trade Commission (FTC) has on Wednesday concluded its antitrust review of Mars’ pending acquisition of Kellanova, clearing the deal, while the European Union opened its antitrust investigation into the acquisition over concerns it would lead to higher prices for consumers.
M&M's and Snickers maker Mars announced in August last year that it would acquire snack food business Kellanova, marking a multibillion dollar agreement set to result in a new industry giant.
The deal valued Kellanova - which is behind snacks such as Pringles and Pop-Tarts - at $35.9 billion (£27.95bn). It owns legacy Kellogg brands, including in snacks, crackers, and frozen breakfasts, after spinning off its North American cereals business in 2023 as WK Kellogg Co.
The FTC granted early termination of its review, after nearly a year of investigation, noting that the transaction does not meet the standard for an anticompetitive merger.
However, the FTC noted in a statement that "in other countries, Mars and Kellanova offer different products than they do in the United States," arguing that the effects on the market could be different.
"Our job is to determine whether there is a violation of American law that we can prove in court. And once we’ve concluded there is not, our job is to get out of the way," said Daniel Guarnera, director of the FTC's Bureau of Competition.
Both Mars and Kellanova welcomed the development.
“We are very pleased that the FTC has completed its review of the transaction without the imposition of any condition or requiring any remedy” Poul Weihrauch, president and chief executive of Mars, Incorporated, said.
“The transaction has now received all but one of the 28 required regulatory clearances, with only the review by the European Commission outstanding. This brings us one step closer to uniting two iconic businesses with complementary footprints and portfolios, allowing us to deliver more choice and innovation to consumers.”
Steve Cahillane, chairman, president and chief executive of Kellanova, said: “This represents a significant milestone on our path to combine Mars Snacking and Kellanova. We continue to believe this is an exciting opportunity to create a broader, global snacking business that is better positioned to meet evolving consumer needs and preferences.”
EU probes takeover
The European Commission said Wednesday that a preliminary assessment indicated the deal would increase the bargaining power of Mars against retailers in the 27-nation bloc.
"By acquiring Kellanova, Mars will add several very popular brands of potato chips and cereals to its already broad and strong product portfolio," EU competition chief Teresa Ribera said.
"As inflation-hit food prices remain high across Europe, it is essential to ensure that this acquisition does not further drive up the cost of shopping baskets," she said.
The in-depth investigation will assess the deal's impact on the price of products sold by the two companies, she added.
Mars said it was cooperating with the probe and remained confident that the acquisition would "deliver more choice and innovation to consumers".
"We are disappointed yet remain optimistic that this investigation will be positively resolved," the company said in a statement.
The acquisition would bring two new billion-dollar brands, Pringles and Cheez-It, into Mars’ snacks portfolio.
Mars has said that the combined grouping aims to meet demand in fast-growing markets including Africa and Latin America. But the EU said several retailers across the bloc had raised concerns about Mars's increased bargaining power, should it be able to add Kellanova's "must-have brands" to its portfolio.
"As a result, retailers could be forced to accept higher prices, in order to avoid not being able to offer the products of Mars and Kellanova," the commission said, adding that its decision would be published by 31 October.
