Mars, the maker of M&M's, is set to buy Kellanova for nearly $30 billion.

Mars, the maker of M&M's, is set to buy Cheez-Its and Pop-Tarts maker Kilanoff for about $30 billion in a bid to expand its snack food portfolio and expand globally.

Kellanova was created last year when Kellogg Kellanova has been split into two companies. Chicago-based Kellanova sells many of the former company’s most profitable brands, including Pringles, Eggo, Townhouse, Morningstar Farms and Rice Krispies Treats. The company had net sales of more than $13 billion last year and has about 23,000 employees.

Mars said Wednesday it will pay $83.50 per share in cash. The company estimated the total value of the deal at about $35.9 billion, including debt.

The deal will give Mars much greater buying power over suppliers and greater leverage in negotiations with grocery stores and other retailers, said Randall Kenworthy, senior partner specializing in consumer products at consulting firm West Monroe.

Mars and Kellanova combined would control about 8 percent of the U.S. snack market, compared with a 9 percent share for PepsiCo, which owns Frito-Lay, he added.

Kenworthy said Kelanova also has a larger international footprint, which will help Mars expand abroad. Mars has made a lot of improvements to its organizational efficiency that it can apply to Kelanova, he added.

“Strategically, it makes a lot of sense,” Kenworthy said.

It is the largest deal in the sector since JM Smucker bought Hostess. At $5.6 billion last year, it's among the biggest investments in 2024 after Exxon Mobil. $60 billion acquisition From Pioneer Natural Resources and Capital One Financial $35 billion acquisition From Discover Financial Services.

Mars approached Kelanova a few months ago to discuss the deal, said Steve Cahillane, Kelanova’s CEO and chairman. Kelanova has posted higher-than-expected revenue in the past few quarters and confirmed its full-year guidance despite tough economic conditions, Cahillane noted.

“I think Mars — seeing this momentum — pushed them to step up and say, ‘You know, now is the time, we should talk to these guys,’ so it was really that simple,” Cahillane told The Associated Press.

Mars’ purchase of Kelanova is expected to close in the first half of next year. Once the deal is complete, Kelanova will become part of Mars Snacks, which is also based in Chicago.

While some corporate functions may be consolidated, he expects most of Kelanova's employees to be integrated into Mars, Cahill said.

“They own gum factories, they own pet food factories, we own Pringles factories, we own Cheez-It factories. You can't make our food in their factories,” he said. Cahillane said he would run the Kellanova plant until the deal closed.

Mars, headquartered in McLean, Virginia, is one of the largest private companies in the United States. The company said it had net sales of $50 billion last year and has 150,000 employees.

“Kellanova’s brands significantly expand our snacking platform, allowing us to more effectively meet consumer needs and drive profitable business growth,” Andrew Clark, global president of Mars Snacks, said in a statement.

Arun Sundaram, an analyst at investment research firm CFRA, said he expects U.S. antitrust regulators to scrutinize the deal against the backdrop of rising food prices. He believes the deal will eventually go through because there is little overlap between the two companies’ portfolios.

Regulators may be concerned about the overlap in healthy snacks at the two companies, Kenworthy said. Kelanova owns RxBar and NutriGrain, while Mars owns Kind and Nature's Bakery. But Kahilani said there's very little overlap in the large, fragmented healthy snack category.

The acquisition would expand Mars’ reach into the salty snack category. The company owns brands like Combos and Ben’s Original, but is primarily known for its chocolate, candy and pet food. Mars makes M&M’s and Lifesavers candies, Juicy Fruit gum and Skittles candy, as well as Pedigree and Royal Canin pet food, among other products.

Sales of some Mars products, Like gumChocolate sales have declined in recent years as snacking habits change. Chocolate sales in the United States have also declined as younger consumers seek out other flavors, such as sour candy. According to a Nielsen IQ report, chocolate sales in the United States fell 5.5 percent over the past year.

Other companies have also added salty snacks to their lineup in an effort to change American tastes. In 2017, candy bar maker Hershey Company acquired Amplify.the maker of Skinny Pop popcorn, for $1.2 billion. Four years later, Hershey acquired Skinny Pop for $1.2 billion. Spent another $1.2 billion For Dots Home Products from Pretzel.

The acquisition would also open the door to potentially lucrative product lines like Skittles-flavored Pop-Tarts or Snickers-flavored Pringles. Such limited-time offers, which It has appeared repeatedly. As food companies try to grab consumers' attention and gain space on store shelves.

Kenworthy said the timing is perfect because easing inflation and prices will make branded snacks more attractive to customers who have switched to cheaper store brands. Economists say many Consumers seem to be coming back. Kellanova’s product prices have returned to pre-pandemic levels, when most companies felt they couldn’t raise prices much without losing business. Kellanova cut prices by 1% in North America in the second quarter and saw sales volumes rise 2%.

The other company formed from the Kellogg breakup, W.K. Kellogg Co., retains cereal brands such as Raisin Bran, Frosted Flakes and Froot Loops, which have suffered from slowing sales in recent years. It is not involved in the deal.

“Mars gets the crown jewel in terms of byproduct components,” Kenworthy said.

Mars began in 1911, when founder Frank Mars began making and selling buttercream candies from his home in Tacoma, Washington. The company moved to Chicago in 1929 and introduced Snickers the following year.

Mars has grown steadily through acquisitions. It entered the pet food business in 1935 by buying a British dog food brand, and bought an ice cream brand called Dove in 1986. In 2008, it bought chewing gum maker Wrigley for $23 billion.

Kelanova shares rose about 8% to close at $80.28 on Wednesday.

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This story has been updated to correct the fact that Mars' brand is Ben's Original, not Uncle Ben's.