Five elite US law firms have helped to push through the biggest M&A deal of the year so far – the $36bn acquisition of Pringles and Pop Tarts maker Kellanova by Mars.
The all-cash offer values Kellanova at $83.50 per share – a premium of around 33% to its 52-week high as of 2 August.
At $35.9bn, the transaction is the largest M&A deal announced so far this year, beating out Capital One’s February agreement to acquire Discover Financial Services for $35.3bn.
The high offer is a sign of Mars’s enduring faith in the snacks market, despite the pressures of health- and money-conscious consumers.
‘In welcoming Kellanova’s portfolio of growing global brands, we have a substantial opportunity for Mars to further develop a sustainable snacking business that is fit for the future’, said Mars CEO Poul Weihrauch in a statement.
Skadden advised Mars with a team led from New York by Legal 500 M&A Hall of Famer Howard Ellin and M&A partners Neil Stronski and June Dipchand. Also involved were Washington DC tax partner Cliff Gross and executive compensation and benefits partner Joseph Penko, intellectual property and technology partner Bruce Goldner in New York. Antitrust matters were handled by Clifford Aronson in Washington DC, Michael Sheerin in New York, and Frederic Depoortere in Brussels.
Meanwhile, Kirkland & Ellis advised Kellanova with a team led by corporate partners Erich Schiele and Allison Wein in New York and Emily Lichtenheld in Austin. Chicago capital markets partners Robert Goedert and Ashley Sinclair and Legal 500 capital markets equity offerings leading lawyer Robert Hayward also advised, while antitrust issues were handled by Andrea Agathoklis Murino and Albert Kim in Washington DC, Thomas Wilson in Brussels, and Sion Davies in London.
Legal 500 transactional executive compensation Hall of Famer Scott Price and Matthew Wood in New York provided executive compensation advice. Also involved from New York were employment and labour partners R.D. Kohut and Jackson Phinney, and tax partners Dean Shulman, Adam Kool, and Maria Smith. Finally, the team also included Chicago’s global technology and IP transactions practice co-lead Seth Traxler, tech and IP transactions partner Rory Wellever, and debt finance partner and Legal 500 commercial lending leading lawyer Michelle Kilenney.
Simpson Thacher & Bartlett advised Mars on financing with a New York team including banking and credit partner Catherine Burns, global capital markets cohead and Legal 500 high-yield debt offerings leading lawyer Kenneth Wallach, capital markets partners Hui Lin and Richard Fenyes, and tax partner Jonathan Cantor.
Cravath Swaine & Moore represented the lead arrangers and bookrunners of committed debt financing with a New York team led by Legal 500 commercial lending leading lawyer Tatiana Lapushchik and corporate partner Matthew Kelly.
Sullivan & Cromwell advised Lazard as financial advisor to Kellanova’s board of directors with a team led by New York corporate partner Stephen Kotran.
Closure is expected in the first half of 2025.
Recent weeks have seen a reassuring flurry of other big deals around the world, with Spanish power company Iberdrola reaching an agreement on 2 August to buy a majority stake in the UK’s Electricity North West (ENW).
The Madrid-based utility multinational will buy an 88% stake in ENW, which provides electricity to around five million people in the northwest of England. The deal values ENW at €5bn in total including debt.
Clifford Chance acted for Iberdrola with a team led by M&A partners Nicholas Hughes and Graham Phillips. The selling consortium was advised by an Ashurst team led by global corporate practice head Jason Radford and corporate partner Jacob Gold, with support from corporate partner Bruce Hanton. It is also understood that Freshfields also advised ENW, with a team led by corporate partner David Sonter and finance partner Jenny McIvor.
‘This shows that investor appetite for the electricity sector in the UK remains very robust’, Radford told Legal Business. ‘Buyers are clearly comfortable with regulatory risk after the recent general election.’
Radford also highlighted the significance of the deal for the UK energy sector: ‘This isn’t about sitting there with a regulated utility clipping a very safe yield per annum. These companies need significant investment to enable them to build out their networks to respond to the ongoing electrification of the UK, and therefore to the ongoing needs of society when it comes to the transition to a net zero economy. It’s a growth opportunity now, in a way that it wasn’t seen as even as recently as five years ago.’
The UK has been a core part of Iberdrola’s strategy since its 2007 merger with ScottishPower. Iberdrola has invested around €36bn in total in the country since then, and this deal brings the total size of its UK regulated networks asset base to €14bn, surpassing its €13.3bn US assets to become its largest market. Iberdrola will now distribute electricity to around twelve million people and employ more than 8,500 in the UK.
In another billion-pound deal, UK events media and information company Informa has agreed to buy rival media firm Ascential for £1.2bn, with buy and sell-side roles for CC and Slaughter and May respectively.
CC advised Informa with a multijurisdictional cross-practice team led by London corporate partners Legal 500 mid-market and premium M&A next-generation partner Katherine Moir and Steven Fox, with support from others including Washington DC antitrust partner Brian Concklin and London partners Chinwe Odimba-Chapman, Sonia Gilbert, and Legal 500 acquisition finance next generation partner Julia House in employment, incentives, and finance respectively.
Slaughters advised Ascential with a team including corporate and M&A group co-head and Legal 500 equity capital markets leading individual Richard Smith, corporate partner Richard Hilton, employment and incentives partner Phil Linnard, competition partner Lisa Wright, tax partner and Legal 500 corporate tax next generation partner Charles Osborne, and financing partner and Legal 500 derivatives and structured products leading individual Ed Fife.
As well as its role on the Mars deal, Kirkland has also advised on Apollo’s £2.7bn purchase of UK delivery company Evri from Advent International, marking the largest UK logistics sector PE buyout in the last five years. Advent bought a 75% stake in Evri, called Hermes until a 2022 rebrand, from German retail company Otto Group in 2020.
Kirkland advised Advent on the sale. Legal 500 high-value private equity transactions Hall of Famer Adrian Maguire and corporate partners Dan Clarke and Claire Rushton led the team, with support from Sam Trowbridge and Legal 500 corporate tax leading partner Mavnick Nerwal on tax, London technology and IP transactions team head Emma Flett, and debt finance partners Leon Daoud and Thomas Raftery.
Paul Weiss advised funds and affiliates manage by Apollo with a team led by finance partner David Carmona, corporate partner Matthew Friedman, Legal 500 EU and competition next generation partner Annie Herdman in London and global finance and capital markets cochair Legal 500 high-yield debt offerings leading lawyer Gregory Ezring and global derivatives head Manuel Frey in New York, with support from Legal 500 corporate tax leading partner Timothy Lowe in London and cochair of the investigations and cybersecurity and data protection practice groups John Carlin in Washington DC and litigation partner Nicole Succar in New York.
Sidley Austin also represented funds managed by Apollo with a team led by private equity partners Gerald Brant in New York and Paul Dunbar and Jonathon Hamill in London, with support from others including London employment partner Peter McCorkell.
A&O Shearman also had a role in the transaction, fielding a team led by Luxembourg corporate partner and Legal 500 commercial, corporate and M&A nex generation partner Jacques Graas to advise funds managed by Apollo.
