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Mars' proposed acquisition of Kellanova has received a crucial endorsement from the US Federal Trade Commission (FTC), which has completed its antitrust review without imposing any conditions. This decision marks a significant milestone in the $36 billion deal, which seeks to unite two major players in the global food and beverage market, particularly in the snacking segment.

The FTC’s review process involved extensive interviews with stakeholders across the supply chain, including both large retailers and small independent businesses. This thorough approach was designed to assess the potential impact of the merger on competition and consumer prices.

Daniel Guarnera, director of the Bureau of Competition, noted that the commission's investigation included data analysis, sworn testimonies and the review of hundreds of thousands of documents. Ultimately, the FTC concluded that there was no violation of US antitrust laws, thereby allowing the transaction to proceed without any restrictions.

Mars CEO Poul Weihrauch expressed optimism about the approval: “This brings us one step closer to uniting two iconic businesses with complementary footprints and portfolios, allowing us to deliver more choice and innovation to consumers”.

The merger is expected to enhance Mars’ capabilities in the snacking category, integrating Kellanova’s well-established brands such as Pringles, Cheez-It, and Eggo into Mars’ extensive portfolio. This strategic alignment aims to create a more robust offering in the face of shifting consumer preferences towards convenience and health-conscious snacking options.

However, the acquisition still faces scrutiny from the European Commission, which has initiated an in-depth investigation under EU merger regulations. The Commission has expressed preliminary concerns that the merger could lead to increased prices for consumers due to Mars’ enhanced negotiating power with retailers.

Specifically, the Commission highlighted that both companies hold strong market positions, with Mars already offering several 'must-have' products such as Twix, Snickers and Skittles. There are fears that retailers might be compelled to accept higher prices to continue stocking these popular brands, particularly in light of ongoing inflationary pressures affecting food prices across Europe.

Teresa Ribera, executive vice president for Clean, Just and Competitive Transition at the European Commission, underscored the importance of ensuring that the merger does not exacerbate the cost of living for consumers.

She said: "By acquiring Kellanova, Mars will add several very popular brands of potato chips and cereals to its already broad and strong product portfolio. As inflation-hit food prices remain high across Europe, it is essential to ensure that this acquisition does not further drive up the cost of shopping baskets. Our in-depth investigation will assess the transaction’s impact on the price of these companies’ products for consumers in the EEA."

Both Mars and Kellanova are optimistic about the potential benefits of the merger, which they believe could lead to improved product innovation and expanded market reach. The combined entity is expected to leverage its extensive resources and expertise to develop new products that cater to evolving consumer demands, particularly in health and wellness categories.

Steve Cahillane, chairman, president and CEO of Kellanova, added: “This represents a significant milestone on our path to combine Mars Snacking and Kellanova. We continue to believe this is an exciting opportunity to create a broader, global snacking business that is better positioned to meet evolving consumer needs and preferences.”