Chocolate manufacturer Mars wants to take over Pringles’ parent company, Kellanova. However, the European Commission (EC) is concerned that Mars will gain too much power as a result and significantly increase its prices. Therefore, Brussels wants to investigate the consequences of the deal before granting approval.
This is one of the largest acquisitions in the sector ever, involving approximately 36 billion dollars (30.7 billion euros). Several retailers have expressed their concerns to the EC about the proposed deal. The companies believe that Mars will gain so much power that they will have to accept large price increases from the company, which will also drive up prices for consumers.
Mars already has a dominant position in various markets. For example, it is strongly represented in the chocolate aisle, with brands such as Mars, Snickers, M&M’s, and Twix. It also sells a lot of pet food from brands such as Sheba, Whiskas, and Pedigree.
Kellanova also has a strong position in some sub-markets. In addition to Pringles, the company also markets many breakfast cereals under the Kellogg’s brand name.
“By acquiring Kellanova, Mars is adding several very popular brands of chips and breakfast cereals to its already broad and strong product portfolio,” says responsible European Commissioner Teresa Ribera. “With food prices remaining high across Europe due to inflation, it is essential to ensure that this acquisition does not further drive up the cost of the shopping basket.”
The extensive investigation could lead to Brussels rejecting the deal. However, it is also possible that Mars will have to divest certain parts to address competition concerns. The investigation will be completed by the end of October at the latest.