Mars will pay US$83.50 a share in cash for the maker of Pringles chips and Eggo waffles, the companies said in a statement. The price represents a premium of 33% over Kellanova’s closing price on Aug 2, the last business day before the deal talks were initially reported. The candy maker intends to finance the deal through cash on hand and new debt.

Kellanova shares rose as much as 8.7% in trading before US markets opened.

Top Kellanova shareholder WK Kellogg Foundation Trust and the Gund Family, which collectively represent 20.7% of the company’s stock, have committed to vote for the deal, the companies said. It is expected to close in the first half of 2025.

The packaged food industry has been grappling with declining volumes, slowing growth, and a weakening global consumer. Companies are looking to innovation and new markets to bolster sales as shoppers start to push back on price hikes.

Kellanova is faring better than most of its competitors with a string of strong earnings since it spun off the cereal business as WK Kellogg Co. late last year. Earlier this month, Kellanova raised its guidance for the full year as new products and marketing drove sales in the second quarter.

For closely held Mars, buying Kellanova will help diversify its chocolate-heavy portfolio away from cocoa, whose prices have risen to historic levels this year. Kellanova would also help Mars scale in international markets. After closing, Kellanova will become part of Mars Snacking, which the company says it aims to double in the next decade.

Financing for the deal includes a bridge loan facility of US$29 billion that will be available to Mars as the acquirer, Kellanova said in a filing.

Analysts have said a Mars-Kellanova tie-up would not face major antitrust concerns because of the limited overlap between the two companies’ products.