(Reuters) -Family-owned packaged food giant Mars, whose candy brands include M&M's and Snickers, is exploring a potential acquisition of Kellanova, maker of snacks such as Cheez-It and Pringles, according to people familiar with the matter. 

A deal would be one of the biggest ever in the packaged food sector, given Kellanova's market value of about $27 billion including debt, and test the appetite of regulators to allow consolidation in the sector. 

Shares of Kellanova are up about 20% since it split from WK Kellogg Co last October, but are still trading at a discount to some of its peers, such as Hershey and Mondelez International, making it a potential acquisition target. 

There is no certainty that Kellanova will pursue a deal with Mars, the sources said. Another suitor could also approach Kellanova, and it's possible that no deal with any party is reached, the sources added, requesting anonymity because the matter is confidential.

Kellanova declined to comment, while spokespeople for Mars did not immediately respond to requests for comment.

Dealmaking in the packaged food sector has been robust as companies seek scale to weather the impact of price inflation and weight-loss drugs weighing on demand.

Last year, J.M. Smucker acquired Twinkies maker Hostess Brands for $5.6 billion, in a deal that united two major American snack makers.

But many of the deals have been smaller than the mega merger between Heinz and Kraft clinched almost a decade ago, as U.S. antitrust regulators have become more concerned about such transactions leading to higher prices and fewer choices for consumers.

Food prices have risen 25% between 2019 and 2023, faster than other consumer goods and services, according to recent statistics from U.S. Department of Agriculture.

The Federal Trade Commission and the state of Colorado have sued to block grocery store operator Kroger's $25 billion proposed acquisition of Albertsons, citing concerns the deal would hike prices for millions of Americans.

A deal for Kellanova would be the biggest ever for Mars, dwarfing its $9.1 billion takeover of veterinary hospital operator VCA in 2017.

The McLean, Virginia-based company has been seeking to diversify its business through acquisitions. It is owned by its founder Frank C. Mars' descendants and generates about $47 billion in annual sales. It operates under three divisions; Mars Petcare, Mars Snacking, and Mars Food & Nutrition.

Kellanova makes its products in 21 countries and markets them in more than 180 countries. Its separation from WK Kellogg last year left Kellanova with snacks, such as Pop-Tarts and Rice Krispies Treats, frozen breakfast foods, such as Morningstar Farms and Eggo, and an international cereal division.

WK Kellogg, which has a market value of $1.5 billion, kept the cereal business in North America, including Kellogg's, Froot Loops, Frosted Flakes and Rice Krispies cereals, under a licensing agreement it inked with Kellanova.

Reuters reported in May that investment firm TOMS Capital Investment Management had taken a stake in Kellanova and was discussing with the company how it can improve shareholder returns. The details of the discussions between TOMS and Kellanova could not be learned.