Lots of things that sound simple are actually pretty complicated. Take cereal and snacks. Simple enough, right? Yes, except that they're a multi-billion dollar business owned by some of the world's most powerful corporations.
And lately, the big candy companies have been rushing to consolidate as inflation-weary consumers cut back on non-essential purchases. Under President Trump, the Federal Trade Commission is happy to oblige and has ended its review of Mars, Incorporated's $36 billion acquisition of Kellanova, which owns legacy Kellogg brands after spinning off its North American cereals business in 2023.
The FTC announced the action last week, saying it was ending its review early after more than a year of probing that found the "transaction does not meet the standard for an anticompetitive merger set by Section 7 of the Clayton Act.”
However, the European Commission is conducting an in-depth antitrust investigation. The Commission has expressed concerns that the merger could lead to increased market power for Mars, potentially resulting in higher prices for consumers. A decision had been expected by the end of June but is now expected by October 31st, according to C-Store Dive.
Pricier snacks?
In Europe, retailers have expressed concern that Mars will jack up prices of popular candies and snacks, forcing them to raise prices to consumers. Most business analysts, though, have said the companies' product line-ups don't lend themselves to that and the FTC went along with that argument
“In other countries, Mars and Kellanova offer different products than they do in the United States, and they face different market participants, consumer preferences, and shopping practices. Notably, Kellanova continues to sell breakfast cereal in other markets, including the European Union, that it does not sell in the United States,” said Daniel Guarnera, Director of the FTC's Bureau of Competition
Mars said it was disappointed with the EU's decision to extend its review but it remained optimistic over the outcome of the transaction.
"We remain confident the pending combination of Mars Snacking and Kellanova's complementary footprints and portfolios will deliver more choice and innovation to consumers," said Mars in a statement to Reuters.
A friendlier FTC
Under the Biden administration, FTC then-Chair Lina Kahn had turned a jaundiced eye on many mergers but the Trump administration takes a different view.
Current FTC Chair Andrew Ferguson has said he will not hesitate to block deals that harm competition in ways that hurt consumers, but also vowed not to stop deals that do not pose such concerns.
“The Commission cares deeply about any competition concerns that affect American consumers, including in food products,” Guarnera said. “Commission staff closely reviewed every aspect of this transaction, including both specific product markets and potential portfolio effects from the acquisition. They turned over every stone needed to arrive at a robust assessment of the likely competitive effects of this transaction.
“The Trump-Vance FTC takes an America First approach to antitrust enforcement. Our job is to protect competition and consumers in the United States. 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,” Guarnera said.