Ferrero has agreed a $3.1bn takeover of WK Kellogg Co to significantly grow the Italian confectionery giant’s portfolio in North America.
The group said Kellogg’s range of cereal brands, including Frosted Flakes, Froot Loops, Special K and Rice Krispies, were “highly complementary” to its offering and would allow it to serve more occasions throughout the day.
Ferrero will pay $23 per share in cash, which represented a 40% premium to the average share price over the past 30 days, and the deal includes the manufacturing, marketing and distribution of WK Kellogg Co’s portfolio of breakfast cereals across the US, Canada and the Caribbean.
“I am thrilled to welcome WK Kellogg Co to the Ferrero Group,” said Giovanni Ferrero, executive chairman of the Ferrero Group. “This is more than just an acquisition – it represents the coming together of two companies, each with a proud legacy and generations of loyal consumers.
“Over recent years, Ferrero has expanded its presence in North America, bringing together our well-known brands from around the world with local jewels rooted in the US. Today’s news is a key milestone in that journey, giving us confidence in the opportunities ahead.”
WK Kellogg was formed as part of a radical overhaul of Kellogg Co in 2023. The former parent company spun out two fully independent companies as it split up its operations. WK Kellogg became the North American cereal specialist, while Kellanova, which was subsequently acquired by Mars, contained snacking brands such as Pringles and Pop-Tarts, as well as the international cereal business, including in the UK.
WK Kellogg CEO Gary Pilnick added: “We believe this proposed transaction maximises value for our shareowners and enables WK Kellogg Co to write the next chapter of our company’s storied legacy.
“Since becoming an independent public company in October 2023, we have made excellent progress on our journey to become a more focused and more profitable business – driven by our tremendous people and a winning culture – all while building a strong foundation for future growth.
“Joining Ferrero will provide WK Kellogg Co with greater resources and more flexibility to grow our iconic brands in this competitive and dynamic market. As a family-owned private company with values in line with our founder WK Kellogg, Ferrero provides a great home for our people and has a track record of supporting the communities in which it operates.
“We look forward to collaborating with their team to deliver on the great promise of cereal, explore opportunities beyond cereal, and help us bring our best to consumers every day.”
WK Kellogg has disappointed markets in New York with its trading performance since becoming independent as a declining demand for breakfast cereal hurt sales.
A trading update released alongside the deal announcement highlighted an expected 9% year-on-year decline in net sales of between $610m and $615m for the second quarter.
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