The European Commission is reportedly concerned about Mars’ market share in certain products in various EU countries, as well as its portfolio of well-known brands.
The completion of its $35.9 billion (£28 billion) deal for Kellanova, which owns Pringles, would further increase the firm’s market share, with Reuters reporting that Mars could be required to divest assets in order to address concerns with the deal.
Food Manufacture has reached out to Mars and Kellanova for comment.
According to Reuters, the EU competition department’s preliminary review of the deal will run until 25 June, with Mars unlikely to offer any remedies at this stage.
Speaking when the deal was first announced, Mars snacking division boss Andrew Clarke hinted at the benefits the merger could deliver for the firm.
“The Kellanova brands significantly expand our snacking platform, allowing us to even more effectively meet consumer needs and drive profitable business growth,” he said.
“Our complementary portfolios, routes-to-market and R&D capabilities will unleash enhanced consumer-centric innovation to shape the future of responsible snacking.”
Meanwhile, the CEO of Kellanova Steve Cahillane said: "This is a truly historic combination with a compelling cultural and strategic fit. Kellanova 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."
Kellanova was launched in 2022 as the global snacking arm of the Kellogg Company, which was split into three separate entities. In addition to Pringles, its UK portfolio includes several leading cereal brands such as Corn Flakes and Coco Pops.
The firm’s share price has fallen since the news first emerged a few days ago, closing at 78.67 on Friday.
Reacting to the news, Julian Wild, food industry analyst and director of Wilkin Chapman Rollits, told Food Manufacture that given the size of the deal an antitrust investigation was inevitable.
“The two companies have significant market shares throughout the 27 EU countries and this consolidation will put tremendous supply strength in Mars’ hands,” Wild said.
“It seems certain that the competition authorities will require action to get this deal through and that usually involves the divestment of assets in categories where concentration is excessive.
“Understandably, the parties are holding their ground at the moment and not offering to offload anything, but their hand will be forced. It’s just a matter of time.”
