<p>Jeffrey Greenberg / Universal Images Group via Getty Images</p>

Jeffrey Greenberg / Universal Images Group via Getty Images

Key Takeaways

  • Shares of the companies that dominate the shelves of America’s supermarkets rose on Wednesday after Mars said it would buy snack maker Kellanova for $36 billion.
  • Kellanova was spun out of cereal maker Kellogg late last year amid a slew of corporate separations by some of America’s most storied companies.
  • The Mars acquisition comes amid heightened regulatory scrutiny of grocery industry consolidation and a bout of inflation.

Shares of the companies that dominate the center aisles of America’s grocery stores got a boost on Wednesday from news of Mars Inc.’s $36 billion purchase of snack maker Kellanova (K). 

Kellanova was the best-performing stock in the S&P 500 in morning trading Wednesday, rising more than 7%. Among other gainers were Orville Redenbacher parent ConAgra Brands (CAG), cereal giant General Mills (GIS), and Campbell Soup (CPB). All three rose about 2% as the S&P 500 edged higher. The consumer-staples sector just outperformed the broader index.

Kellanova, the maker of Pop-Tarts and Pringles, was spun out of cereal maker Kellogg late last year. The remaining cereal business, which makes cereal aisle staples Rice Krispies and Frosted Flakes, was rebranded as WK Kellogg (KLG), shares of which were recently up more than 4%.

The spin-off came amid a rush of corporate separations from storied American companies, including GE, which began splitting itself into three separate companies in 2023 after years of struggling with cumbersome operations and a mountain of debt, and Johnson & Johnson (JNJ), which separated its consumer and pharmaceutical businesses the same year. 

Mars’s Kellanova acquisition comes as American consumers grapple with the aftermath of the country’s worst bout of inflation since the 1980s. Rising grocery prices, one of the few expenses people face daily, have been especially galling for wary consumers. 

The particular pain of rapidly rising grocery prices has complicated the merger and acquisition landscape for food and grocery companies. Supermarket chains Krogers (KR) and Albertsons (ACI) have been fighting with regulators for nearly two years to have their $24 billion merger approved. 

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