Mergers &
Acquisitions

The mining and food industries saw major consolidation this week as Pan American Silver moves to dominate silver production while Ferrero makes a sweet play for breakfast dominance with its Kellogg acquisition.

1. Pan American Silver Acquires MAG Silver for ~$2.1 Billion

Pan American Silver (NYSE: PAAS) has secured shareholder approval to acquire MAG Silver (NYSE: MAG) in a $2.1 billion cash-and-stock deal, creating a silver mining powerhouse with industry-leading low-cost assets. The deal centers on MAG's 44% stake in the Juanicipio mine, which produces 14.7-16.7 million ounces annually at remarkably low costs ($1.00/oz cash costs).

The acquisition adds 112 million ounces to Pan American's silver reserves while providing access to MAG's Utah and Canada projects. Despite the strategic benefits, markets reacted skeptically - MAG shares rose 6.8% while Pan American's stock plunged 16%, reflecting concerns about the premium paid and integration challenges.

With Juanicipio only 10% explored and potential reactivation of Guatemala's Escobal mine, the combined entity could challenge industry leaders. MAG shareholders will own approximately 14% of the merged company.

Acquirer: Pan American Silver (Vancouver, British Columbia)
Target: MAG Silver (Vancouver, British Columbia)
Deal Value: ~$2,100,000,000 (Cash + Stock)
Announcement Date: July 11^th, 2025
Acquirer Advisors: National Bank Financial (Financial) + Borden Ladner Gervais LLP (Legal)
Target Advisors: BMO Capital Markets and GenCap Mining Advisory (Financial) + Blake, Cassels & Graydon LLP (Legal)

Summary

• Pan American creates silver mining leader with MAG's high-margin assets and exploration potential
• Deal adds 112M ounces to reserves at industry-low production costs
• Market reaction mixed due to integration risks despite clear strategic benefits

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2. Ferrero Acquires WK Kellogg for ~$3.1 Billion

Ferrero Group is making its biggest U.S. push yet with a $3.1 billion acquisition of WK Kellogg, combining Nutella and Ferrero Rocher with Frosted Flakes and other cereal icons. The deal comes as U.S. cereal sales have declined 6% since 2022, with consumers shifting to protein shakes and breakfast alternatives.

The acquisition accelerates Ferrero's North American expansion following previous buys of candy brands and Wells Enterprises. Kellogg gains access to Ferrero's innovation capabilities to move beyond cereal into snacks and meal solutions. Ferrero will pay $23 per share, with closing expected in late 2025 pending regulatory approval.

This marks Ferrero's boldest move yet to diversify beyond confectionery, though reviving Kellogg's legacy brands in a declining cereal market presents significant challenges.

Acquirer: The Ferrero Group (Alba, Italy)
Target: WK Kellogg (Battle Creek, Michigan)
Deal Value: ~$3,100,000,000 (All-cash)
Announcement Date: July 11^th, 2025
Expected Close: 2nd Half 2025
Acquirer Advisors: Lazard (Lead) + BofA Securities (Co-Advisor) + Davis Polk & Wardwell LLP (Legal)
Target Advisors: Goldman Sachs & Morgan Stanley (Financial) + Kirkland & Ellis LLP (Legal)

Summary

• Ferrero makes $3.1B bet on U.S. breakfast market despite cereal decline
• Combines European confectionery powerhouse with American breakfast icons
• Strategic shift for both companies into broader meal solutions