Chocolate conglomerate Ferrero has agreed to buy cereal business W.K. Kellogg for an enterprise value of $3.1 billion, a deal announced by both companies on Thursday. Ferrero will pay for the company in cash at $23 per share. The announcement sent share prices of W.K. Kellogg up 30%.
The update comes as Ferrero looks to expand its offerings in the North American market by buying more companies. Ferrero currently manages over 35 brands, including Kinder, Nutella, Tic Tac, and others.
As part of the deal, Ferrero will manage all of W.K. Kellogg’s iconic breakfast products, such as Frosted Flakes, Froot Loops, Frosted Mini Wheats, Special K, and more.
“I am thrilled to welcome WK Kellogg Co to 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,” said Ferrero Group’s executive chairman, Giovanni Ferrero.
The Italian chocolate company has been tweaking its existing product line in North America, adding twists such as peanuts in its Nutella and a Dr Pepper version of Tic Tac.
Ferrero will be acquiring Kellogg at a time when performance for the breakfast company is lacklustre, owing to a shift in consumer preferences either for healthier breakfast options or cheaper private brands.
W.K. Kellogg disclosed a slowdown in sales of $663 million in its latest quarterly (Q1 2025) report, down by 6.2% from $707 million on a year-on-year basis. The cereal company has long-term debt of $502 million.
In 2023, W.K. Kellogg broke off from its parent company, Kellogg, and became independent, while Kellogg rebranded to Kellanova. Manufacturing company Mars announced plans to buy Kellanova for $36 billion in a deal that is yet to close.