The European Commission has opened an in-depth investigation to assess the proposed acquisition of Kellanova by Mars.
The Commission said it has “preliminary concerns” that the transaction could lead to higher prices for consumers due to Mars’ increased negotiating power towards retailers in the European Economic Area (EEA).
The Commission’s preliminary investigation indicated that, by enlarging its product portfolio with the addition of Kellanova’s very popular brands, Mars could “increase its bargaining power” with regard to retailers. As a result, the Commission said Mars could be in a position to use this increased leverage to, for example, extract higher prices during negotiations, which in turn would lead to higher prices for consumers.
More specifically, the Commission’s serious doubts are based on the following preliminary findings:
- The parties each have a “strong market position” in several product markets in multiple Member States. This is in part due to the fact that they carry brands that are considered must-have for end consumers.
- Several retailers across the EEA have raised concerns about Mars’ increased bargaining power, should it be able to add Kellanova’s must-have brands to its existing portfolio. As a result, retailers could be forced to accept higher prices, in order to avoid not being able to offer the products of Mars and Kellanova.
- Many consumers tend to make their primary grocery shopping in a single supermarket and could decide to change supermarket if they could not find the companies’ products.
It raised “serious doubts” as to the impact of the transaction on competition, in relation to the supply of many of the parties’ products in several Member States, and said it would carry out an in-depth investigation into the effects of the proposed transaction to determine whether the initial competition concerns are confirmed.
The proposed transaction was notified to the Commission on 16th May 2025. The Commission now has 90 working days, until 31st October 2025, to make a decision.
Teresa Ribera, executive vice-president for Clean, Just and Competitive Transition, commented: “By acquiring Kellanova, Mars will add several very popular brands of potato chips and cereals to its already broad and strong product portfolio.
“As inflation-hit food prices remain high across Europe, it is essential to ensure that this acquisition does not further drive up the cost of shopping baskets. Our in-depth investigation will assess the transaction’s impact on the price of these companies’ products for consumers in the EEA.”
Acquisition cleared in the US
This comes as the acquisition cleared the US Federal Trade Commission (FTC) Antitrust Review.
Poul Weihrauch, CEO and office of the president, Mars, Incorporated, said: “We are very pleased that the FTC has completed its review of the transaction without the imposition of any condition or requiring any remedy.
“The transaction has now received all but one of the 28 required regulatory clearances, with only the review by the European Commission outstanding. This brings us one step closer to uniting two iconic businesses with complementary footprints and portfolios, allowing us to deliver more choice and innovation to consumers.”
Steve Cahillane, chairman, president and CEO, Kellanova, said: “This represents a significant milestone on our path to combine Mars Snacking and Kellanova. We continue to believe this is an exciting opportunity to create a broader, global snacking business that is better positioned to meet evolving consumer needs and preferences.”
Based on the current status of the ongoing antitrust review by the European Commission, Mars and Kellanova expect the transaction to close towards the end of 2025, subject to customary closing conditions.
