Inside the $36bn Mars–Kellanova merger: What EU approval could mean for global snacking

Kellanova (NYSE: K) shares edged higher on fresh reports suggesting that the European Commission is leaning toward granting unconditional approval for Mars Incorporated’s $36 billion purchase of the snack and breakfast-foods company. The rumored outcome, first circulated in Brussels-based wire coverage earlier this week, would remove the final major regulatory barrier after the United States already cleared the transaction without conditions in mid-2025. Sources cited by Reuters said investigators have not found sufficient evidence to justify forcing divestitures or behavioral remedies. The formal decision is expected by December 19 2025, marking the end of an eighteen-month review that at times tested the patience of both companies and investors.

Why did Kellanova’s share price move higher on speculation that the European Commission will approve the Mars takeover?

Kellanova stock climbed modestly during intraday trading as investors interpreted the Brussels reports as an implicit confirmation that the deal is nearing closure. For merger-arbitrage funds, the signal matters: if the Commission clears the deal without demanding asset sales, the spread between the current price and Mars’ cash offer collapses to near zero, essentially locking in the gain. The move echoed the pattern seen after the Federal Trade Commission in Washington D.C. gave its nod earlier in the summer, an event that many analysts viewed as a precedent for European regulators to follow.

Mars had announced in August 2024 that it would acquire Kellanova for $83.50 per share in cash—valuing the Chicago-based snack and cereal firm at roughly $35.9 billion to $36 billion. At the time, the deal represented about a 25 percent premium to Kellanova’s pre-announcement trading range. The financing package, largely debt-backed by a syndicate of global banks, underscored Mars’s confidence in expanding beyond its confectionery and pet-care roots into broader snacking segments.

How did the EU review evolve from early antitrust skepticism to what now looks like a clean approval?

When Mars first submitted the merger filing in early 2025, European Commission officials signaled caution. They worried that the combined portfolio could give Mars excess leverage with retailers and potentially raise consumer prices in several snacking categories. Those concerns prompted a Phase II investigation in June 2025, extending the timeline and briefly pausing the procedural clock while investigators gathered more market data.

By late September, however, sources indicated that no “smoking gun” had emerged to prove that competition would be substantially lessened. The investigation covered categories such as savory snacks, breakfast foods, and portable breakfast items—areas where Mars and Kellanova products overlapped only marginally. Regulators also examined supply-chain dynamics and retailer dependence but found the companies operated in largely adjacent niches rather than direct substitutes. That legal nuance appears to have tipped the balance toward unconditional approval.

What does the Mars–Kellanova combination mean for the global packaged-foods landscape in 2025 and beyond?

If finalized, the acquisition would mark one of the largest consumer-goods transactions of the decade—comparable in scale to the 2015 Kraft–Heinz merger. For Mars, the deal completes a transformation from a confectionery-focused company into a diversified food empire spanning candy, pet nutrition, and global snacking. For Kellanova, it closes the chapter that began with Kellogg Company’s 2023 split into two entities: WK Kellogg for cereal and Kellanova for snacks and frozen breakfast.

Kellanova’s portfolio—Pringles, Cheez-It, Eggo, Pop-Tarts, and MorningStar Farms—brings a stable of power brands with combined annual revenue of about $13 billion. Mars adds these to its own heavyweights like M&M’s, Snickers, Twix, Whiskas, and Pedigree. Analysts estimate that the merged entity would control roughly 12 percent of the U.S. snacking and confectionery market, a scale unmatched by any single competitor.

Strategically, Mars will fold Kellanova into its Mars Snacking division headquartered in Chicago, maintaining brand autonomy while leveraging global distribution and marketing capabilities. Industry observers say the synergies extend beyond marketing—procurement, ingredient sourcing, and R&D efficiencies could produce hundreds of millions of dollars in cost savings over three years.

Could EU approval still carry risks around market power, pricing, or retailer relationships?

Even with an unconditional nod, scrutiny won’t vanish. European retailers and consumer-advocacy groups may pressure Mars to avoid post-merger price hikes, especially as food inflation remains a political flash point. Regulators often conduct ex-post monitoring to ensure merged entities do not abuse dominant positions. That means Mars will need to manage perceptions carefully by keeping its pricing strategy in line with market averages and maintaining fair trading terms with retail chains such as Tesco, Carrefour, and Ahold Delhaize.

Still, the fact that EU competition law demands quantifiable evidence of harm works in Mars’s favor. Without clear proof of price coordination or input bottlenecks, the Commission traditionally hesitates to block consumer deals that promise efficiencies and brand investment. That legal standard appears to have guided the current case.

How is investor sentiment shaping around Kellanova stock and the remaining merger-arbitrage spread?

At midday Thursday, Kellanova traded just under $83 per share, a fraction below the offer price. That tiny discount suggests markets see a near-certain closure. Arbitrage funds that entered earlier in the year when the spread was 3–4 percent are now locking profits. For new entrants, risk-reward is limited unless the stock pulls back. Retail investors tracking deal names may prefer to hold through completion for the final cash payout.

In sentiment terms, Wall Street classifies Kellanova as “neutral to positive.” The stock’s year-to-date gain has largely come from deal premium rather than operational growth. Institutional ownership remains high, with passive funds like Vanguard and BlackRock holding significant positions. Because the company is U.S.-listed, foreign institutional flow metrics such as FII/DII ratios don’t apply, but ETF and mutual-fund activity show net inflows into large-cap consumer-staple baskets since the deal was announced.

The practical advice floating around analyst notes leans toward “hold until close.” There is little upside left to capture, but the downside risk appears minimal unless a surprise regulatory setback occurs. For active investors, the bigger opportunity may lie in peer names that could become next acquisition targets if this deal sets a precedent for further consolidation.

What timeline and next steps should investors and employees expect once the EU delivers its decision?

Assuming the Commission issues a favorable ruling in December, closing could follow within weeks. The two companies have already completed most integration planning and employee briefings, with transition teams based in Chicago and McLean, Virginia. Brand management structures are expected to remain largely intact, a strategy that helped Mars maintain growth after its 2008 acquisition of Wrigley.

Post-closing, Mars will likely report Kellanova’s performance under its Snacking segment starting in fiscal 2026. Analysts expect initial integration costs to weigh on margins but believe synergies could add $500 million in annual EBITDA within three years. Credit-rating agencies have indicated Mars’s A-grade profile should remain stable despite the debt financing, thanks to its strong cash generation from pet-care and confectionery divisions.

 

How does this merger reshape competition, innovation, and pricing strategy across global snacking and convenience foods?

Beyond shareholder value, the deal reshapes how multinationals approach the fast-growing “anytime snack” segment. Consumer habits are shifting toward portable meals and protein-rich options, and companies are racing to own shelf space and distribution muscle. Mars’s scale gives it negotiating power in supply chains and marketing budgets that smaller players cannot match. Meanwhile, Kellanova’s R&D strength in texture and flavor innovation adds a new dimension to Mars’s portfolio.

Competitors like Mondelez International, Nestlé, and General Mills are expected to re-evaluate their snack divisions for possible divestitures or bolt-on acquisitions. Analysts believe a wave of deal making could follow as firms seek to balance growth with portfolio focus. The Mars–Kellanova case also serves as a litmus test for how far antitrust authorities are willing to let brand consolidation run in exchange for claimed efficiencies and R&D commitments.

Why investors see this as a near-certain close—and what could still derail it in late-cycle review

In the eyes of the market, the deal now carries a 90-plus percent probability of closing. The only real risk factor would be a sudden political intervention or new evidence that reshapes the Commission’s competition model. Given that no major stakeholder has filed fresh complaints since September, those scenarios look remote. The Commission’s final ruling will nevertheless set an important precedent for future large-cap consumer mergers in Europe.

Will the Mars–Kellanova merger mark the turning point for scale and consolidation in global consumer goods?

For Kellanova shareholders, the journey from spin-off to takeover has been swift and profitable. For Mars, it is a once-in-a-generation move to cement its status as a snack-and-pet powerhouse with a revenue base that could approach $70 billion post-integration. Assuming the EU confirms approval by year-end, the transaction will close a multiyear cycle of consolidation in the consumer packaged-goods sector. The next chapter will no longer be about regulatory hurdles—but about how Mars executes on distribution, pricing, and brand synergies in a crowded global snack market.