Mars, Incorporated Announces Pricing of $26 Billion of Senior Notes

Rhea-AI Summary

Mars, Incorporated has announced the pricing of a $26 billion private senior notes offering, structured across eight different tranches with varying maturities from 2027 to 2065. The notes carry interest rates ranging from 4.450% to 5.800%, with interest payable semi-annually.

The offering is expected to close around March 12, 2025. The proceeds will fund Mars' pending acquisition of Kellanova (NYSE: K). Upon completion of the acquisition, Kellanova is expected to guarantee the notes on a senior unsecured basis. If the acquisition is not completed by August 20, 2026, or if the merger agreement is terminated earlier, the notes will be subject to a special mandatory redemption at 101% of principal plus accrued interest.

Positive

• Large-scale strategic acquisition financing secured
• Structured debt with varied maturities (2027-2065) reducing refinancing risk
• Senior guarantee from Kellanova post-acquisition enhancing note security

Negative

• Significant debt burden of $26 billion added to balance sheet
• Mandatory redemption risk if acquisition fails
• Higher interest expense with rates up to 5.800%

MCLEAN, Va., March 5, 2025 /PRNewswire/ -- Mars, Incorporated (the "Company" or "Mars") announced today the pricing of its previously announced private offering of $26.0 billion aggregate principal amount of senior notes, consisting of $2.0 billion in aggregate principal amount of 4.450% Senior Notes due 2027 (the "2027 Notes"), $3.25 billion in aggregate principal amount of 4.600% Senior Notes due 2028 (the "2028 Notes"), $4.5 billion in aggregate principal amount of 4.800% Senior Notes due 2030 (the "2030 Notes"), $2.75 billion in aggregate principal amount of 5.000% Senior Notes due 2032 (the "2032 Notes"), $5.0 billion in aggregate principal amount of 5.200% Senior Notes due 2035 (the "2035 Notes"), $2.75 billion in aggregate principal amount of 5.650% Senior Notes due 2045 (the "2045 Notes"), $4.75 billion in aggregate principal amount of 5.700% Senior Notes due 2055 (the "2055 Notes") and $1.0 billion in aggregate principal amount of 5.800% Senior Notes due 2065 (the "2065 Notes" and, together with the 2027 Notes, the 2028 Notes, the 2030 Notes, the 2032 Notes, the 2035 Notes, the 2045 Notes and the 2055 Notes, the "Notes"). Interest on the 2027 Notes, the 2028 Notes, the 2030 Notes, the 2032 Notes and the 2035 Notes will be payable semi-annually on March 1 and September 1 of each year, beginning on September 1, 2025. Interest on the 2045 Notes, the 2055 Notes and the 2065 Notes will be payable semi-annually on May 1 and November 1 of each year, beginning on November 1, 2025. The 2027 Notes will mature on March 1, 2027. The 2028 Notes will mature on March 1, 2028. The 2030 Notes will mature on March 1, 2030. The 2032 Notes will mature on March 1, 2032. The 2035 Notes will mature on March 1, 2035. The 2045 Notes will mature on May 1, 2045. The 2055 Notes will mature on May 1, 2055. The 2065 Notes will mature on May 1, 2065. The offering is expected to close on or about March 12, 2025 (the "Issue Date"), subject to customary closing conditions.

The Company intends to use the net proceeds from the offering of the Notes, together with other financing sources and cash on hand, to fund the pending acquisition (the "Acquisition") of Kellanova, a Delaware corporation (NYSE: K) ("Kellanova"), and pay related fees and expenses. The Acquisition remains subject to customary closing conditions, including regulatory approvals. The closing of this offering is not conditioned upon the consummation of the Acquisition. If the Acquisition is not consummated on or prior to August 20, 2026, or the merger agreement for the Acquisition is earlier terminated, the Notes will be subject to a special mandatory redemption at a redemption price equal to 101% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest thereon, if any.

On the Issue Date, the Notes will not be guaranteed by any of the Company's subsidiaries. Upon the consummation of the Acquisition, Kellanova is expected to guarantee the Notes on a senior unsecured basis.

The Notes are being offered in a private transaction in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), in the United States only to investors who are reasonably believed to be "qualified institutional buyers," as that term is defined in Rule 144A under the Securities Act, or to non-U.S. persons outside the United States pursuant to Regulation S under the Securities Act. The Notes have not been registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States without registration or an applicable exemption from registration requirements.

This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of any of the Notes in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

This communication contains "forward-looking statements" which reflect management's expectations regarding the Company's future growth, results of operations, operational and financial performance and business prospects and opportunities. These statements or disclosures may discuss goals, intentions and expectations as to future trends, plans, events, results of operations or financial condition or state other information relating to the Company, based on current beliefs of management as well as assumptions made by, and information currently available to, the Company. Forward-looking statements generally will be accompanied by words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "intend," "may," "possible," "potential," "predict," "project" or other similar words, phrases or expressions. Although the Company believes these forward-looking statements are reasonable, they are based upon a number of assumptions concerning future conditions, any or all of which may ultimately prove to be inaccurate. Forward-looking statements involve a number of risks and uncertainties that could cause actual results to vary. Such forward-looking statements may include, among other things, statements about the offering of the Notes and about the Acquisition. All forward-looking statements in this communication apply only as of the date made and are expressly qualified in their entirety by this cautionary statement. Except as otherwise required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances.

Contact: Kelly Frailey, kelly.frailey@effem.com

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SOURCE Mars, Incorporated

FAQ

What is the total value of Mars' senior notes offering for Kellanova (K) acquisition?

Mars is offering $26 billion in senior notes across eight tranches with maturities ranging from 2027 to 2065.

What happens to Mars' notes if the Kellanova (K) acquisition fails?

If the acquisition isn't completed by August 20, 2026, or the merger agreement terminates earlier, notes will be redeemed at 101% of principal plus accrued interest.

What are the interest rates for Mars' senior notes for Kellanova (K) purchase?

Interest rates range from 4.450% to 5.800%, with the lowest rate for 2027 notes and highest for 2065 notes.

When will Mars' senior notes for Kellanova (K) acquisition begin paying interest?

Interest payments begin September 1, 2025 for 2027-2035 notes, and November 1, 2025 for 2045-2065 notes.