Mars' $36 billion Kellanova merger wins U.S. approval, faces EU antitrust hurdle

Candy giant Mars' proposed $35 billion acquisition of Pringles-maker Kellanova has passed scrutiny in the United States but hit regulatory turbulence in Europe, according to media reports. EU antitrust authorities have launched a full-scale investigation citing potential consumer harm.

On Wednesday, the U.S. Federal Trade Commission (FTC) announced early termination of its review, signalling that the merger does not violate antitrust laws. "Once we've concluded there is not a [a violation], our job is to get out of the way," Daniel Guarnera, Director of the FTC's Bureau of Competition said in a media report. The FTC said the deal does not meet the threshold for an anticompetitive merger.

Also Read: EU antitrust ruling on Mars' $36 billion Kellanova takeover due by June 25

Mars welcomed the decision and confirmed that all regulatory clearances except from the European Union had been secured. The company expects to complete the transaction by the end of 2025. Kellanova, formerly part of Kellogg Company, did not comment on the U.S. approval, reports added.

However, the European Commission said it had "serious concerns" that the Mars-Kellanova merger could reduce competition and lead to price hikes in grocery stores.

The Commission warned that the merger could give Mars significant leverage in price negotiations with retailers, especially as both firms control household-name brands - ranging from Snickers, M&MS, and Whiskas to Pringles, Pop-Tarts, and Kellogg cereals, the report added.

Combined, the new entity would hold approximately 12% of the U.S. snacking and candy market, per NielsenIQ, while still facing competition from industry giants like PepsiCo, Mondelez, Kraft Heinz, Hershey, and General Mills, according to reports.

Retailers across Europe have voiced have voiced concerns that Mars' strengthened bargaining power could leave them with no choice but to accept higher prices in order to retain must-have brands on their shelves.

The European Commission has set a deadline of October 31 for its final decision, and may require Mars to divest assets to address competition concerns - or risk the deal being blocked, reports added.

Also Read: Snickers maker Mars to acquire Pringles and Cheez-it for nearly $30 billion