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Mars Buys The Maker Of Pringles In A Mega Deal For $36 Billion

The family-owned giant Mars, whose portfolio includes the popular chocolate desserts Twix, Snickers and M&M’s chocolate candies, is acquiring Pringles maker Kellanova. The deal will be completed in the first half of 2025.

KEY FACTS 

  • The deal is valued at nearly $36 billion and will bring together under one roof popular consumer brands including Mars’ Twix, Bounty and Milky Way chocolates, as well as Kellanova’s portfolio of Pop-Tarts, Rice Krispies Treats and Eggo frozen waffles.
  • This is the largest deal in the packaged food sector and will allow Mars to diversify its business by expanding its operations. Kellanova manufactures products in 21 countries and markets them in over 180 countries. 
  • Mars will pay $83.50 per share for Kellanova, which represents about a 33% premium to Kellanova’s closing price on Aug. 2. Kellanova shares rose as much as $80.45 in premarket trading. 
  • According to the calculations of the “Reuters” agency, the value of the company’s shares is 28.58 billion dollars.
  • The deal comes at a time when growth in the U.S. packaged food sector is slowing due to inflation and the incomes of consumers who prefer cheaper products.
  • The acquisition is not expected to face too many regulatory hurdles. The acquisition will test regulators’ willingness to allow consolidation in the packaged foods sector.

THE BIG NUMBER

47 billion dollars. This is the size of the annual turnover of Mars. The family-owned company is based in Virginia and began selling buttercream candies from a small kitchen in 1911.

Amazon’s AI Bets and Cost-Cutting Measures Pay Off, Boosting Stock by 5%

Shares of Amazon surged over 5% in after-hours trading on Thursday after the company reported stronger-than-expected third-quarter earnings. Amazon announced earnings per share of $1.43, alongside revenue reaching $158.9 billion, surpassing analyst projections of $1.14 per share and $157.2 billion in revenue, according to FactSet.

Key Financial Highlights

  • North American Sales: Amazon’s North American segment recorded a 9% year-over-year sales increase, totalling $95.5 billion.
  • AWS Growth: Amazon Web Services (AWS), the company’s cloud unit, posted $27.5 billion in revenue, marking a 19% rise compared to the same period last year.
  • Stock Movement: Although Amazon’s stock initially fell over 3% on Thursday before earnings were released, it rebounded significantly in after-hours trading. So far, Amazon shares are up almost 24% year-to-date.

Background on Amazon’s Strategy

Amazon’s recent efforts include major cost-cutting moves, guided by CEO Andy Jassy, to streamline operations since 2022. This restructuring has led to over 27,000 layoffs and the closure of initiatives such as Amazon’s telehealth and same-day delivery services. Despite these reductions, Amazon is doubling down on other key areas, like a $52 billion investment in nuclear energy to support data centers in Virginia, Mississippi, and Ohio. The company is also moving forward with **Project Kuiper**, aiming to build a satellite network of 3,236 units to broaden internet access worldwide—a venture projected to involve over $10 billion in launch costs across five years, according to analysts from Wedbush Securities.

Amazon’s Market Reach

July’s Prime Day achieved “record-breaking sales,” while the introduction of Amazon’s AI-powered shopping assistant, **Rufus** was rolled out to U.S. customers last month. Notably, Amazon had slightly missed expectations in the previous quarter and cautioned that intense news cycles could distract customers—a factor cited by CFO Brian Olsavsky during the second-quarter earnings call. Despite these challenges, the company’s annual revenue is expected to remain strong.

Noteworthy Figures

Amazon’s market capitalization has reached $1.96 trillion, making it the fifth-largest company globally, trailing behind Apple, Nvidia, Microsoft, and Google. Meanwhile, Jeff Bezos, who served as Amazon’s CEO until 2021, holds a net worth of $204.1 billion, much of which is tied to Amazon’s stock. Market fluctuations ahead of Amazon’s earnings report momentarily decreased Bezos’ wealth by around $6 billion. Bezos ranks as the second-richest American, after Elon Musk, on the Forbes 400 list.

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