Seoul Gazette - EU probes Mars takeover of Pringles maker Kellanova

The European Commission said a preliminary assessment indicated that the purchase could increase the bargaining power of Mars, the maker of M&M's and Snickers, towards retailers operating 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."

The in-depth investigation will assess the transaction's impact on the price of products sold by the two companies, she added.

Mars' $35.9 billion (31 billion euros) all-cash purchase of US-based Kellanova -- which is behind snacks such as 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 for $83.50 per share would bring two new billion-dollar brands, Pringles and Cheez-It, into its business, which already counts on 15 such brands.

The combined portfolio was suited to meet demand in fast-growing markets such as Africa and Latin America, given their supply chains and local operations, it added.

But the EU said several retailers across the union have raised concerns about Mars' 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, the EU's antitrust regulator said.

The investigation will determine whether these concerns are confirmed, it said, adding it had until October 31 to take a decision.

The opening of a probe does not prejudge its outcome, it added.

P.Hwang--SG