The largest deal announced in 2024 through August came after a drought in $10 billion-plus global M&A deals in July.
Mars Inc.'s proposed $35.57 billion acquisition of Kellanova was the only M&A deal with a transaction value of $10 billion or more announced in August, and the first in the third quarter. The last $10 billion-plus deal was announced June 24, when Abu Dhabi National Oil Co. said it would acquire Covestro AG in a $15.41 billion transaction.
The Mars-Kellanova transaction, however, was not the largest deal announced in the last 12 months. Exxon Mobil Corp.'s $65.32 billion purchase of Pioneer Natural Resources Co. and Chevron Corp.'s $60.65 billion planned acquisition of Hess Corp., announced in October 2023, both have transaction values nearly double that of the snack food deal.
Tasty transaction
The Mars-Kellanova deal is the first large deal announced in the consumer sector since Roark Capital Management LLC agreed to buy Doctor's Associates Inc. for $10 billion in August 2023.
Growth is slowing in the consumer sector as inflation begins to cool, Erin Lash, director of consumer equity research at Morningstar Research Services, said in an interview. Consolidation could allow the companies to boost revenue and collaborate across product lines, Lash said.
While both Mars and Kellanova produce food products in similar categories — such as Kellanova's savory cereals and crackers and Mars' sweet chocolate bars and chewing gum — the brands' salty versus sweet distinction gives executives confidence that the deal can withstand regulators' scrutiny of possible monopolies, Lash said.
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Deal updates
A deal between U.S. Steel Corp. and Japan-based Nippon Steel Corp. could be in jeopardy after Vice President Kamala Harris said U.S. Steel should be domestically owned and operated, according to reporting from The Wall Street Journal. President Joe Biden, former President Donald Trump and the United Steelworkers union also oppose the deal.
While the US may close the door on one deal, another was completed successfully. Occidental Petroleum Corp.'s $12.39 billion acquisition of CrownRock LP, announced in December 2023, closed in August.
