The merger of two food giants?

The deal would be one of the largest ever in the food sector, given Kellanova's market value of about $27 billion including debt, and would test regulators' appetite to allow consolidation in the sector.

Kellanova shares have risen about 20% since it was spun off from WK Kellogg Co last October, but it still trades at a discount to some rivals, such as Hershey and Mondelez International, making it a potential acquisition target.

There is no certainty that Kellanova will make a deal with Mars, the sources said. Another suitor could also approach Kellanova, and it is possible that no agreement will be reached with either party, added the sources, who requested anonymity because the matter is confidential, reports Seebiz.

Last year, J.M. Smucker bought "Twinkies" maker Hostess Brands for $5.6 billion, in a deal that united two major US snack makers.

But many of the deals have been smaller than the mega-merger between Heinz and Kraft nearly a decade ago, as US antitrust regulators have grown more concerned about such transactions leading to higher prices and fewer choices for consumers.

Food prices rose 25% between 2019 and 2023, faster than other consumer goods and services, according to recent statistics from the US Department of Agriculture.

The Federal Trade Commission and the state of Colorado sued to block the $25 billion acquisition of Albertsons by grocery operator Kroger, citing concerns that the deal would raise prices for millions of Americans.

The Kellanova deal would be the largest ever for Mars, eclipsing its $9.1 billion takeover of veterinary hospital operator VCA in 2017.

The Virginia-based company is looking to diversify its business through acquisitions. It generates about 47 billion dollars in annual sales. It operates through three divisions: Mars Petcare, Mars Snacking and Mars Food & Nutrition.