Brussels (Belgium) (AFP) – The European Union said Wednesday that it had opened an antitrust investigation into Mars’s multibillion-dollar acquisition of the snack food business Kellanova over concerns it would lead to higher prices for consumers. The European Commission said a preliminary assessment indicated the deal would increase the bargaining power of Mars, the maker of M&M’s and Snickers, against retailers in the 27-nation bloc.
“By acquiring Kellanova, Mars will add several very popular brands of potato chips and cereals to its already broad and strong product portfolio,” EU competition chief Teresa Ribera said. “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,” she said. The in-depth investigation will assess the deal’s impact on the price of products sold by the two companies, she added.
Mars said it was cooperating with the probe and remained confident that the acquisition would “deliver more choice and innovation to consumers.” “We are disappointed yet remain optimistic that this investigation will be positively resolved,” the company said in a statement.
The US Federal Trade Commission meanwhile approved the merger on Wednesday, saying it posed no violation of antitrust law in the United States. However, the FTC noted in a statement that “in other countries, Mars and Kellanova offer different products than they do in the United States,” arguing that the effects on the market could be different.
“Our job is to determine whether there is a violation of American law that we can prove in court. And once we’ve concluded there is not, our job is to get out of the way,” said Daniel Guarnera, director of the FTC’s Bureau of Competition.
Mars’s $35.9 billion (31 billion euro) all-cash purchase of US-based Kellanova — whose snacks include Pringles and Pop-Tarts — was announced in August last year. At the time, Mars, which is also headquartered in the United States, said the acquisition would bring two new billion-dollar brands, Pringles and Cheez-It, into its snacks portfolio. The combined grouping aims to meet demand in fast-growing markets including Africa and Latin America, it added.
But the EU said several retailers across the bloc had raised concerns about Mars’s increased bargaining power, should it be able to add Kellanova’s “must-have brands” to its portfolio. “As a result, retailers could be forced to accept higher prices, in order to avoid not being able to offer the products of Mars and Kellanova,” the commission said, adding that its decision would be published by October 31.
© 2024 AFP
