People familiar with the matter said Wednesday that Mars's $36 billion bid to acquire Pringles maker Kellanova will face a thorough antitrust investigation by the EU, a step that may force the candy giant to divest assets to address competition concerns.
The European Commission, which acts as a competition watchdog in the 27-nation bloc, is concerned about Mars's large market share in certain products within some EU countries, sources said.
No concessions have been offered so far
Sources said that Mars, owned by a family, is unlikely to offer solutions to address these concerns during the initial review of the deal by the European Competition Authority, which ends on June 25.
The European Commission declined to comment, and neither Mars nor Kellanova responded to repeated emails requesting comment.
Mars announced the deal last August, which will bring together brands from M&M's and Snickers to Pringles and Pop-Tarts under one roof.
The canned food sector in the United States has seen a wave of mergers as companies seek to expand to counter the impact of inflation-strained consumers who have cut their spending and turned to cheaper private-label products.
Warnings about the deal's impact on European stores
European retailers have expressed their concerns about the deal, pointing to the power of major suppliers of branded packaged goods, and to the high concentration in products such as breakfast cereals, soft drinks, candies, and frozen treats.
They say that such high market shares give large suppliers the ability to impose restrictions and practices that harm the interests of retailers.
