Shares of Kellanova, the producer of popular snacks like Pringles, Rice Krispies Treats, and Pop-Tarts, surged by 22% on Monday following Reuters' report about a potential deal with confectionery giant Mars. This deal could become one of the most significant in the history of the packaged food sector, attracting the attention of investors and analysts.

According to reports, Mars is considering acquiring Kellanova as a strategic move to expand its portfolio and enter new international markets. TD Cowen analyst Robert Moscow notes that integrating Kellanova’s portfolio of popular brands into Mars's structure could significantly enhance the company's global scale.

This deal reflects current trends in the packaged food market, where there has been an increase in large transactions since last year. In August 2023, Campbell Soup acquired Sovos Brands, owner of Michael Angelo's and Rao's, for $2.33 billion, and in September, J.M. Smucker purchased Hostess Brands for $5.6 billion. These acquisitions demonstrate the active interest of major players in expanding their portfolios and strengthening their market positions.

Currently, Kellanova's shares are trading at $77 in pre-market, with a market value of approximately $27 billion, including debt. Analyst Brian Holland of D.A. Davidson forecasts that Kellanova could achieve more than $87 per share based on a projected EBITDA multiple of 15 times over the next 12 months. Consequently, the brokerage firm has raised its target price for Kellanova's shares to $80, reflecting the potential increase in stock value if the deal is successfully completed.

At the same time, Mondelez is considered another potential buyer; however, analysts believe that financial constraints may pose a challenge for this scenario. This underscores the complexity and high cost of deals in this sector, where companies must consider not only strategic but also financial aspects.

However, current trends in the market indicate a slowdown in sales growth among American packaged food producers such as Kraft Heinz, Mondelez, and Hershey. Budget-conscious consumers are increasingly opting for cheaper alternatives to branded products, which is putting pressure on sales. In the context of slowing economic growth and high company valuations, market leaders are seeking large-scale mergers to drive synergy and optimize costs.

In this context, the Mars-Kellanova deal could not only be a significant event for both companies but also reflect current trends in the packaged food industry, where consolidation and strategic acquisitions are becoming essential tools for achieving growth and competitive advantage.