Exclusive-Mars' $36 billion Kellanova deal faces EU antitrust investigation, sources say
By Foo Yun Chee
BRUSSELS (Reuters) -Mars' $36 billion bid for Pringles maker Kellanova is set to face a full-scale EU antitrust investigation, people close to the matter said on Wednesday, a move that could require the candy giant to divest assets to address competition concerns.
The European Commission, which acts as the antitrust watchdog in the 27-country bloc, is concerned about Mars' high market share in some products in some European Union countries, the sources said.
Family-owned Mars is unlikely to offer remedies to assuage such concerns during the EU competition enforcer's preliminary review of the deal, which ends on June 25, the sources said.
The Commission declined to comment. Mars and Kellanova did not respond to repeated emails for comment.
Mars announced the deal in August last year that will bring together brands from M&M's and Snickers to Pringles and Pop-Tarts under one roof.
There has been a wave of consolidation in the U.S. packaged food sector as companies seek scale to weather the impact of inflation-weary consumers cutting back on spending and shifting to private label brands.
European retailers have voiced concerns about the deal, citing the power of large international suppliers of branded packaged goods and the high concentration levels in products such as breakfast cereals, carbonated drinks, confectionery and frozen desserts.
They say such high market shares give large suppliers the power to impose restrictions and practices to retailers' detriment.
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