Ferrero, the Italian confectionery conglomerate, is set to acquire WK Kellogg Co, the maker of Kellogg’s Corn Flakes, for $3.1 billion (£2.3bn), marking a significant expansion into the breakfast cereal market.
Ferrero has announced its intention to invest in and grow WK Kellogg’s “iconic” brands, which include popular cereals such as Froot Loops and Rice Krispies.
The privately held, family-owned Ferrero has been actively expanding its portfolio in recent years, with previous acquisitions including Nestle’s confectionery business and other prominent food companies.
However, this latest acquisition presents a portfolio facing headwinds, as changing consumer preferences, rising prices, and health concerns have impacted the demand for traditional boxed cereals.
Established in 1946, Ferrero has become a global leader in the chocolate and confectionery industry, boasting a portfolio of over 30 brands, including Nutella, Kinder, Tic Tac, Jelly Belly, and Trolli.
This acquisition will significantly strengthen Ferrero’s presence in the North American market, where it already employs over 14,000 people, giving it a dominant position in the U.S. breakfast cereal sector.
Ferrero is offering $23 per share in cash for the company. News of the impending deal had already triggered a surge in the firm’s share price, with overnight trading showing gains exceeding 56%.
Lapo Civiletti, Chief Executive Officer at Ferrero, stated that the deal would complement the company’s existing product range, “expanding Ferrero’s presence across more consumption occasions.”
WK Kellogg Co CEO, Gary Pilnick, anticipates that the acquisition will provide the company with increased resources, emphasizing that Ferrero’s private ownership structure, free from the pressures of the public market, will provide “a great home for our people.”
Will Keith Kellogg, the founder of Kellogg, is credited with inventing corn flakes, having established the business in Michigan nearly 120 years ago.
Kellogg’s iconic mascots, such as Tony the Tiger of Frosted Flakes, have contributed to its status as one of the most recognizable American brands of the 20th century.
However, the company, which also produces brands like Kashi and Raisin Bran, has experienced stagnant sales in recent years and carries over $500 million in debt.
In 2023, WK Kellogg Co was spun off from its former parent company’s international snacks business, which was subsequently renamed Kellanova and later sold to confectionery giant Mars for $36bn.
Consumer price sensitivity amid the rising cost of living has also led to increased preference for cheaper store brands over traditionally more expensive name brands.
The industry has also faced scrutiny, including from the Trump administration, which targeted artificial coloring in products like Froot Loops as part of its “Make America Healthy Again” campaign.
Kellogg has committed to removing synthetic colors from cereals served in schools by the 2026-27 school year, but a timeline for their removal from cereals sold to the general public has not yet been established.
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