Kellanova ( K ) shares are trading higher on Wednesday after Mars, Inc. agreed to acquire the company for $83.50 per share, valuing it at $35.9 billion, including assumed net leverage.

The transaction price of $83.50 per share for Kellanova ( K ) reflects a 44% premium over its 30-day average trading price and a 33% premium over its 52-week high as of August 2, 2024.

The deal values Kellanova ( K ) at 16.4 times its last twelve months adjusted EBITDA as of June 29, 2024.

Mars plans to finance the acquisition with a mix of cash reserves and new debt, with commitments already secured.

The acquisition includes all of Kellanova’s brands, assets, and operations, covering its snacking brands, international cereal and noodles, North American plant-based foods, and frozen breakfast products.

The Kellanova Board of Directors has unanimously approved the agreement. The transaction, pending shareholder and regulatory approvals, is expected to close in the first half of 2025.

Kellanova ( K ) is allowed to declare and pay quarterly dividends as usual before the transaction closes.

Notably, in October 2023, Kellanova ( K ), which has the global snacking, international cereal and noodles, plant-based foods, and North American frozen breakfast business, completed its separation from WK Kellogg Co ( KLG ) .

Kellanova’s portfolio, including brands like Pringles and Cheez-It, will complement Mars’ existing brands, such as SNICKERS, M&M’S, and KIND, as well as its pet care brands, including ROYAL CANI and PEDIGREE.

Steve Cahillane, Chairman, President and CEO of Kellanova ( K ), added, “This is a truly historic combination with a compelling cultural and strategic fit. Kellanova ( K ) has been on a transformation journey to become the world’s best snacking company, and this opportunity to join Mars enables us to accelerate the realization of our full potential and our vision.”

“The transaction maximizes shareholder value through an all-cash transaction at an attractive purchase price and creates new and exciting opportunities for our employees, customers, and suppliers.”

Andrew Clarke, Global President of Mars Snacking, commented, “This is an exciting opportunity to create a broader, global snacking business, allowing Kellanova ( K ) and Mars Snacking to both achieve their full potential. Kellanova ( K ) and Mars share long histories of building globally recognized and beloved brands. The Kellanova brands significantly expand our Snacking platform, allowing us to even more effectively meet consumer needs and drive profitable business growth.”

The W.K. Kellogg Foundation Trust and the Gund Family have committed to vote shares representing 20.7% of Kellanova’s common stock in favor of the transaction as of August 9, 2024.

Investors can gain exposure to the stock via First Trust Nasdaq Food & Beverage ETF ( FTXG ) and iShares Emergent Food and AgTech Multisector ETF ( IVEG ) .

Price Action: K shares are up 7.54% at $80.12 premarket at the last check Wednesday.

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