As the old Pringles advertising catchphrase goes, 'once you pop, you can't stop'. Even if you're not quite sure which company is doing the 'popping'.
With the acquisition of Kellanova by Mars, the much-loved snack brand is changing hands once again – previously owned by Procter & Gamble, it was acquired by Kellogg's in 2012, and now looks set to join the home of M&Ms and Maltesers, subject to competition approval.
It was owned by P&G a decade ago, and then Kellogg's in 2012, and now Mars.
Mars Deal
In the recently announced deal, Mars will acquire all outstanding equity of Kellanova for $83.50 per share in cash, representing a total enterprise value of $35.9 billion (€32.7 billion).
Kellanova had net sales of more than $13 billion (€11.8 billion) in 2023, with a presence in 180 markets and approximately 23,000 employees. Pringles, along with Cheese-It, Pop-Tarts and Eggo, is one of the stars of the group's snacks portfolio.
Andrew Clarke, global president of Mars Snacking, said the acquisition will offer the opportunity to create "a broader, global snacking business."
"The Kellanova brands significantly expand our snacking platform, allowing us to even more effectively meet consumer needs and drive profitable business growth," said Clarke.
Kellogg's Acquires Pringles
If that sounds familiar, it's because it echoes the sentiment shared by Kellogg's back in 2012, when it acquired Pringles from P&G, describing the brand as an 'excellent strategic fit' for Kellogg's, adding that it would 'significantly advance' the company's aim to build a 'global snacks business on par with its global cereal business'.
P&G agreed to divest its snacks business to the Kellogg Company in a $2.7 billion (€2.45 billion) all-cash transaction, which was completed in February 2012.
“Kellogg shares similar values and principles to us and we are confident that the Pringles business will thrive under Kellogg’s leadership," P&G’s chairman, president and CEO, Bob McDonald, said at the time.
P&G developed Pringles back in 1968 – originally marked as 'Pringle's Newfangled Potato Chips', introducing the product to Europe in 1991.
Prior to the deal with Kellogg's, the Cincinnati-based company had hoped to offload the brand to Diamond Foods, then then-owner of Kettle Chips, before the latter firm abruptly called off the deal, with the associated accounting difficulties leading to the suspension of then-Diamond CEO Michael Mendes.
Growth Rates
In acquiring Pringles, Mars is taking on a brand that is showing steady growth in recent periods.
'The salty snacks category is growing at low to mid-single-digit growth rates in developed markets while sustaining mid-teens growth in emerging markets like Poland and Romania,' Kellanova noted about Pringles when announcing first quarter sales back in May. 'Impressively, Pringles has gained share across most markets in the first quarter.'
The brand saw a surge of activity around the Euro 2024 football tournament, while other recent marketing initiatives launched by the brand include a 'crisps and caviar collection' (pictured), unveiled alongside The Caviar Co, a limited-edition 'bagel' flavour, and a tie-up with video game Minecraft.
Kellanova was also working on the development of two new factories, one in Latin America, and one in Asia, to boost the brand's capacity. ESM presumes that the completion of both will now fall under Mars' remit.
The timing of the deal makes sense for Mars, as it seeks to boost its snacking portfolio, with more Americans are turning to snacking, because of inflation and rising food prices.
Thus, the future of the Pringles brands seems assured – for now at least.
Additional reporting by Stephen Wynne-Jones
