Kellanova (K) stock is trading notably higher Wednesday on news Mars, the parent company of M&M’s and Snickers, will acquire the snack maker whose brands include Cheez-It and Pringles in an all-cash deal valued at $35.9 billion, including debt.
This works out to $83.50 per K share, a 12% premium to the stock's August 13 close at $74.50.
"In welcoming Kellanova's portfolio of growing global brands, we have a substantial opportunity for Mars to further develop a sustainable snacking business that is fit for the future," said Poul Weihrauch, CEO of Mars, in a statement.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Kellanova was spun off from Kellogg last year. In its latest earnings release, the company's revenue declined 4.7% year-over-year to $3.2 billion while its earnings per share increased 12.2% from the year-ago period to $1.01.
Mars is one of the largest private companies in the United States and is a global manufacturer of confectionery, food and pet food products. Its most popular brands include M&M’s, Snickers, Skittles and Wrigley's.
"We believe a transaction would further validate the power of Kellanova's brands and growth potential, both in North America and internationally," wrote Stifel analyst Matthew Smith. "The transaction would be the largest packaged foods transaction since the Kraft-Heinz merger."
Smith added that the pipeline for potential mergers and acquisitions of packaged food businesses is very full.
What does this mean for Kellanova investors?
According to the terms of the agreement, Kellanova shareholders will receive $83.50 in cash for each share they currently own. While the deal has already been approved by Kellanova's board of directors, it will still need shareholder approval. If you own K stock and have any questions, you can reach out to your broker.
Heading into today's session, Kellanova was up nearly 36% for the year to date on a total return basis (price change plus dividends). Yet, Wall Street is on the sidelines when it comes to the consumer staples stock.
According to S&P Global Market Intelligence, the average analyst target price for K stock is $71.57, representing a discount to current levels. Additionally, the consensus recommendation is a Hold.
Related Content
-
Small Businesses Are Racing to Use AIThe Kiplinger Letter Spurred on by competitive pressures, small businesses are racing to adopt AI. A recent snapshot shows the technology’s day-to-day uses.
-
The Me-First Rule of Retirement SpendingFollow the 'Me-First" rule and you won't have to worry about running out of money when the stock market goes south.
-
I'm a Financial Planner: Could Partial Retirement Be the Right Move for You?Many Americans close to retirement are questioning whether they should take the full leap into retirement or continue to work part-time.
-
From Mortgages to Taxes to Estates: How to Prepare for Falling Interest RatesAs speculation grows that the Federal Reserve will soon start lowering interest rates, now is a good time to review your financial plans for housing, estate, taxes, investing and retirement to make the most of potential changes.
-
This Is How Lottery Winners Build Lasting Legacies, From a Financial ProfessionalWinning a massive lottery jackpot, like the recent $1.4 billion Powerball, requires seeking immediate legal and financial counsel, protecting your identity and winnings and planning your legacy.
-
S&P 500 Slips Ahead of Fed Week: Stock Market TodayAll eyes are on the Federal Reserve ahead of next week's critical policy meeting.
-
September Fed Meeting: Live Updates and CommentaryThe September Fed meeting is a key economic event, with Wall Street keyed into what Fed Chair Powell & Co. will do about interest rates.
-
I'm an Investment Strategist: This Is How the Fed's Next Rate Move Could Impact Your WalletInterest rate cuts might be coming, which could affect everything from your credit card debt to your mortgage. It's smart to prepare now — here's how.
-
I'm a Retirement Planner: These Are Three Common Tax Mistakes You Could Be Making With Your InvestmentsDon't pay more tax on your investments than you need to. You can keep more money in your pocket (or for retirement) by avoiding these three common mistakes.
-
Want to Shave 10 Hours Off Your Workweek? A Startup Expert Shows How AI Can HelpArtificial intelligence is overhauling how companies operate, freeing up entrepreneurs and their workers to skip the menial stuff and get down to business.
