Italian confectionery giant Ferrero has agreed to acquire cereal maker WK Kellogg in a landmark deal valued at $3.1 billion. The acquisition, announced Thursday, comes with a premium price tag of $23 per share—31% above the stock’s closing price the day before.
Following the announcement, WK Kellogg shares surged 30% in premarket trading. Despite the bump, the company’s stock had been underperforming this year, with a decline of over 2% prior to the news. The deal is expected to close in the second half of the year, pending regulatory and shareholder approvals.
WK Kellogg Spins Off Amid Industry Shift Toward Snacks and Health-Conscious Consumer Trends
WK Kellogg, known for iconic American cereal brands like Froot Loops and Frosted Flakes, became an independent entity in 2023 after separating from Kellogg. The split was part of Kellogg’s strategy to pivot towards the snack industry, where growth has been more robust.
The original Kellogg company rebranded as Kellanova and retained popular snack brands such as Pringles and Cheez-It. Interestingly, Kellanova is also in the process of being acquired by Mars for $36 billion, although that transaction remains incomplete.
Ferrero Acquires WK Kellogg for $3.1 Billion, Strengthening U.S. Foothold Amid Shifting Breakfast TrendsThe acquisition reflects the broader trend of consolidation within the packaged food sector. U.S. consumers have increasingly turned away from traditional sugary cereals in favor of healthier breakfast options. Additionally, rising inflation has pushed many shoppers toward more affordable private-label brands. Ferrero’s move to buy WK Kellogg demonstrates a strategic effort to secure a foothold in a changing market by leveraging strong brand recognition, even in a slowing category.
Ferrero Expands North American Presence Through Strategic Acquisitions and Product Innovation Initiatives
Ferrero’s purchase of WK Kellogg further solidifies its presence in North America. In recent years, the company has acquired several major U.S. brands, including Nestlé’s American candy operations and Wells Enterprises, the parent of Halo Top. It continues to innovate for American tastes, with new product launches like peanut Nutella and Dr Pepper-flavored Tic Tacs. These moves indicate Ferrero’s intent to diversify and strengthen its U.S. market appeal beyond traditional confections.
WK Kellogg is set to release its quarterly financials on August 5 but will not hold a conference call due to the pending acquisition. The company’s preliminary results forecast net sales between $610 million and $615 million and adjusted EBITDA ranging from $43 million to $48 million.
While the cereal segment has faced headwinds, Ferrero’s acquisition signals confidence in the brand’s long-term potential. Ferrero Group’s executive chair, Giovanni Ferrero, called the deal a “key milestone” in the company’s North American expansion strategy, hinting at more growth initiatives to come.
