Mars to Acquire Pringles Maker Kellanova in Record $36 Billion Deal

News

Mars, the family-owned candy giant known for brands like M&M’s and Snickers, announced its acquisition of Cheez-It and Pringles maker Kellanova in a deal valued at nearly $36 billion. This marks the largest buyout in the packaged food industry to date.

Mars will pay $83.50 per share in an all-cash transaction, representing a 33% premium over Kellanova’s closing price on August 2, just before news of the potential deal broke. Following the announcement, Kellanova’s shares rose about 8% to $80.45, valuing the company at $28.58 billion on an equity basis.

This strategic acquisition comes at a time when sales growth in the U.S. packaged food sector is slowing, with budget-conscious consumers opting for cheaper, private-label products over more expensive branded items. The deal surpasses Mars’ previous $23 billion takeover of Wrigley in 2008 and will consolidate popular consumer brands under one roof. Mars’ portfolio includes Twix, Bounty, and Milky Way, while Kellanova’s offerings feature well-known snacks like Pop-Tarts, Rice Krispies Treats, and Eggo waffles.

Legal experts suggest that the acquisition is unlikely to face significant antitrust challenges due to the minimal overlap between the two companies’ product lines. Upon completion of the deal, expected in the first half of 2025, Kellanova will be integrated into Mars Snacking, led by Global President Andrew Clarke and based in Chicago.

Daryl Hagler & Other Experts Share Their Thoughts on the Real Estate Market

Real Estate

There’s no question that the 2024 real estate market is filled with both challenges and opportunities. Economists are unconcerned that rising housing prices could lead to another housing crash, expressing optimism that even if prices fall, there will not be nearly as severe a decline as we saw in 2008-2009. Hearing from experts in the field including Daryl Hagler, Dave Liniger and Rick Sharga enables people to get a better handle on what’s happening in the market and on what decisions and investments they should be making.

With the Great Recession looming fresh in their memory, builders have exercised more caution in terms of construction pace, which has led to a shortage of homes for sale. Further tightening the real estate market are those who are locked into a 3% mortgage rate and are reluctant to sell. ­­

Of course no one has a crystal ball, but it’s interesting to hear from real estate experts and to see what they predict for the rest of 2024.

Daryl Hagler cites research demonstrating that stricter environmental regulations and sustainable practices, while important and positive, have increased project costs. On top of this, supply chain disruptions also cause project delays and higher rates. Industry professionals must continue to be strategic and creative in their approach to the 2024 market.

Rick Sharga expresses optimism in Altos Research’s study, which showed that there has been a price reduction among 35% of listed properties, a higher percentage than last year. While this may not inevitably point to a nationwide price drop, it could be viewed as moving in that direction.

Dave Liniger explains that the high mortgage rates unquestionably impact buyer behavior. Home prices continue rising with high demand and low supply, and Lininger expects that as soon as interest rates drop, there will be another “boom and bust cycle.”

The 2024 real estate market is complex for both buyers and sellers. While acknowledging the frustrations that accompany this challenging time, experts from Rick Sharga and Dave Liniger to Daryl Hagler remain optimistic that housing prices and mortgage rates will drop with the growing recognition that housing inventory must increase to stabilize prices.

Chuck E. Cheese Offers Family Membership

News

Chuck E. Cheese has rolled out a new subscription program that is nearly half the cost of a standard Netflix plan. At just $7.99 a month, the entertainment chain is now offering a family membership which allows customers to enjoy a set number of games daily, along with discounts on food, depending on the chosen tier.

The company hopes this initiative will attract budget-conscious families who are cutting back on discretionary spending. Mark Kupferman, Chuck E. Cheese’s executive vice president, stated that the goal was to provide an affordable and enjoyable entertainment option amid financial pressures on households.

The program was tested in select locations across the U.S. and Canada. It received strong demand, selling 350,000 passes. Families can choose from three subscription tiers: $7.99 for 40 games per visit with a 20% food discount; $11.99 for 100 games and a 30% discount; and $29.99 for 250 games with a 50% discount.

While the membership requires a one-year commitment, shorter two-month passes are available at a higher rate, suitable for summer breaks. This move aligns with a broader trend among chains like Sweetgreen and P.F. Chang’s, which are leveraging subscriptions to boost customer loyalty and ensure steady revenue.

Despite the potential benefits, analysts warn that convincing consumers to add another subscription might be challenging, especially in the current economic climate.

Amit Paley, the Movement Against Malnutrition, Work for Efficient RUTF Delivery

Health Care,

Approximately 2 million children die from malnutrition every year. Amit Paley, Executive Director of The Movement Against Malnutrition, explains that there is a simple treatment: Ready-to-Use Therapeutic Food (RUTF). Developed twenty-five years ago, RUTF is a paste made from powdered milk, peanuts, butter, vegetable oil, sugar, and a mix of vitamins and minerals. It has a two-year shelf life, 500 high-nutritional calories, and is tasty for children. There is no need for refrigeration, cooking or water; children can eat the RUTF product directly from the packet. Remarkably, RUTF has been proven to be 90% effective at curing acute malnutrition.

However, due to a complex, inefficient and costly delivery system, only about 1 in 5 children have access to this lifesaving treatment. In addition, it is nearly impossible for families who live in war-torn or rural areas to access health clinics. Amit Paley is working to restructure the current ineffective system in order to simplify the delivery of RUTF so that more children have access to this miracle treatment.

Starbucks Rolls Out Value Menu to Win Back Customers

News

Starbucks is rolling out new initiatives to attract customers, including a value menu aimed at providing more affordable options. Despite a 3% global sales decline and a 2% drop in North America, Starbucks is taking significant steps to address consumer fatigue with high prices.

Starbucks has shifted from a predominantly sit-down coffee shop to a drive-thru and mobile takeout chain, adapting to changes in consumer behavior.

The new “Pairings Menu,” offering a drink and a breakfast item for $5 or $6, has shown promising results. The menu has boosted multi-item orders, indicating that customers appreciate the new value options. Additionally, the Siren System, designed to expedite the preparation of cold drinks, features faster blenders and new dispensers for ingredients like milk and ice.

Starbucks CEO Laxman Narasimhan expressed optimism about the company’s direction. “Our plans are beginning to work,” he said. “We are recovering our brand and rebuilding the operational foundation of our stores and supply chain.”

While Starbucks faces competition from rival drive-thru coffee chains and a growing number of consumers making coffee at home, the company’s innovative strategies aim to enhance customer experience and value. Shares of Starbucks have dropped 19% this year, but rose more than 2% in after-hours trading following the announcement of these initiatives.

Starbucks’ commitment to adapting its business model and offering value to customers demonstrates its dedication to maintaining its position in the market and meeting the evolving needs of its patrons.