(Reuters) - Shares of Pringles maker Kellanova ( K ) surged about 22% in trading before the bell on Monday, after a Reuters report said candy giant Mars was exploring a potential buyout of the company.

A deal between Mars and Kellanova ( K ), known for snacks brands such as Rice Krispies Treats and Pop-Tarts, would be one of the biggest ever in the packaged food sector.

"We believe that K's portfolio of popular snack brands will fit well with Mars' and help them expand scale in international markets," TD Cowen analyst Robert Moskow said in a client note.

Dealmaking in the packaged food space has picked up since last year.

Last August, Campbell Soup ( CPB ) agreed to buy Michael Angelo's and Rao's owner Sovos Brands for $2.33 billion. The following month, J.M. Smucker acquired Twinkies maker Hostess Brands for $5.6 billion in a deal that united two major American snack makers.

Kellanova's ( K ) shares were trading at $77 premarket on Monday. The company had a market value of about $27 billion, including debt, as of the stock's Friday close.

D.A. Davidson analyst Brian Holland expects Kellanova ( K ) to fetch upwards of $87 per share in a takeout, based on 15 times its projected earnings before interest, taxes, depreciation, and amortization (EBITDA) over the next 12 months.

The brokerage raised Kellanova's ( K ) price target to $80 from $73, and ascribes a 50% likelihood of the acquisition.

"Mondelez could be seen as another potential acquirer, though we view the implied leverage as a limiting factor," Holland said.

Sales growth at U.S. packaged food companies such as Kraft Heinz, Mondelez and Hershey have taken a hit as budget-strapped customers save their dollars for essential purchases and hunt for cheaper, private-label alternatives to pricier branded items.

"At times like this when growth slows, balance sheets are relatively clean, and valuations dip, the market leaders in food tend to look more closely at big combinations to drive cost synergies," TD Cowen's Moskow said.

Kellanova's ( K ) forward price-to-earnings ratio for the next 12 months, a common benchmark for valuing stocks, was 16.50, compared with Hershey's 20.99 and Mondelez's 19.69.

(Reporting by Savyata Mishra in Bengaluru; Editing by Devika Syamnath)