Editor’s Note
This article reports on the major acquisition of Kellogg’s cereal business by Italian confectionery giant Ferrero for $3.1 billion. The deal marks a significant expansion for the family-owned company into the competitive U.S. market.
Kellogg’s cereals will change hands after the Italian company Ferrero purchased the business in a transaction valued at $3.1 billion. With this move, the family-owned Italian confectionery company will increase its penetration into the lucrative U.S. market.
Ferrero will pay $23 per share of Kellogg’s in cash, according to a statement issued on Thursday, July 10, representing a premium of approximately 31 percent over Kellogg’s closing price. The deal combines the maker of Nutella, the chocolate hazelnut spread, with the company responsible for Frosted Flakes (Tiger Toño’s Zucaritas), and will expand Ferrero’s empire in the food sector and diversify its portfolio of high-chocolate-content products at a time of higher cocoa prices.
WK Kellogg shares rose 31 percent to $22.86, slightly below Ferrero’s offer price.
Controlled by billionaire Giovanni Ferrero, grandson of the founders, the confectionery company has sought to expand into the United States, focusing on brands that are often in the crosshairs of health regulators and changing consumption trends. Ferrero, which reported a 9 percent increase in sales, reaching €18.4 billion last year, recently acquired the ice cream brand Bomb Pops in 2022.
Ferrero will invest in and expand key Kellogg brands such as Rice Krispies, among others, which are highly valued by American consumers.
The acquisition by Ferrero could boost a business that has struggled to grow since Kellogg’s split into two, with the snack business renamed Kellanova and the cereal brands under WK Kellogg.
