Research Update: Mars Inc. Ratings Placed On CreditWatch Negative On Acquisition Of Kellanova

U.S.-based Mars Inc., a family-owned manufacturer and marketer of confectionery, food, and pet care products and services, is acquiring Kellanova for about $36 billion, or about 16.4x based on Kellanova's last-12-months adjusted EBITDA as of June 29, 2024. We believe the proposed acquisition would substantially increase Mars' leverage. We placed our 'A+' issuer credit rating and issue-level ratings on Mars on CreditWatch with negative implications. We affirmed the 'A-1' short-term and commercial paper ratings. The CreditWatch listing reflects our expectation that we will likely affirm or lower our ratings on Mars following this transaction. We believe a downgrade could be limited to one notch based on available information. A one-notch downgrade would not affect our 'A-1' commercial paper ratings. We

...- U.S.-based Mars Inc., a family-owned manufacturer and marketer of confectionery, food, and pet care products and services, is acquiring Kellanova for about $36 billion, or about 16.4x based on Kellanova's last-12-months adjusted EBITDA as of June 29, 2024. We believe the proposed acquisition would substantially increase Mars' leverage. - We placed our 'A+' issuer credit rating and issue-level ratings on Mars on CreditWatch with negative implications. We affirmed the 'A-1' short-term and commercial paper ratings. - The CreditWatch listing reflects our expectation that we will likely affirm or lower our ratings on Mars following this transaction. We believe a downgrade could be limited to one notch based on available information. A one-notch downgrade would not affect our 'A-1' commercial paper ratings. - We will seek to resolve the CreditWatch following our review of the financial and business impact of the transaction on Mars' credit profile....

Research Update