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
-
Stocks Swing in Volatile Session: Stock Market TodayThe main indexes fell sharply in early trading on rising China tensions, but rebounded thanks to encouraging bank earnings.
-
Don't Miss Out! A Quiz on Medicare Enrollment DeadlinesQuiz Test your basic knowledge of Medicare enrollment periods in our quick quiz.
-
Stocks Swing in Volatile Session: Stock Market Today
The main indexes fell sharply in early trading on rising China tensions, but rebounded thanks to encouraging bank earnings.
-
A 'Fast, Fair and Friendly' Fail: Farmers Irks Customers With Its Handling of a Data BreachFarmers Insurance is facing negative attention and lawsuits because of a three-month delay in notifying 1.1 million policyholders about a data breach. Here's what you can do if you're affected.
-
Serving the HNW Market: How Financial Advisers Can Break Through and Deliver Lasting ValueFinancial advisers have a significant opportunity to serve high-net-worth clients by elevating their capabilities, delivering comprehensive planning, building diverse teams and prioritizing family wealth education.
-
Don't Just Sell, Connect: How Financial Advisers Can Ignite Their Sales GrowthAvoid complacency and embrace small, consistent improvements to optimize your sales process and results.
-
Dow Adds 587 Points as Stocks Bounce: Stock Market TodayThe main indexes rebounded sharply Monday after President Trump took a calmer stance toward China.
-
Are You a Small Business Owner Buckling Under Economic Pressure? Here's How You Can CopeSignificant emotional and financial challenges, including tariff worries, are piling up on small business leaders. Here's how leaders can develop more healthy coping strategies and systems of support.
-
To Raise Prices or Not to Raise Prices: Tariff Tips for Small BusinessesSmall businesses are making critical decisions. Should they pass on higher costs due to tariffs, or would that only cost them more in lost customers?
-
Five Retirement Planning Traps You Can't Afford to Fall Into, From a Wealth AdviserTo help ensure you reach your savings goals and enjoy financial security in your golden years, be aware of these common pitfalls. The key is to be proactive, informed and flexible.
