Ferrero Group to buy WK Kellogg in $3.1 billion deal

LUXEMBOURG — After a flurry of media buzz of a potential deal, candy and sweet foods giant The Ferrero Group is acquiring breakfast cereal maker WK Kellogg Co for $3.1 billion.

The $23-per-share cash acquisition, announced July 10, includes the manufacturing, marketing and distribution of WK Kellogg’s product portfolio in the United States, Canada and the Caribbean. The transaction would take publicly held WK Kellogg private, as Ferrero is family-owned.

The companies said the WK Kellogg board of directors has approved the transaction, which is expected to close in the second half of this year pending shareholder and regulatory approvals and customary closing conditions. They noted that the W.K. Kellogg Foundation Trust and the Gund Family, a WK Kellogg stakeholder, have agreed to vote shares representing 21.7% of WK Kellogg’s common stock, as of July 7, in favor of the transaction.

“I am thrilled to welcome WK Kellogg Co to The Ferrero Group,” said Giovanni Ferrero, executive chairman of Luxembourg-based 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.”

Media and market speculation about a possible Ferrero purchase of WK Kellogg had heated up earlier this year – with reports saying that Ferrero was in the early stages of considering a bid for the Battle Creek, Mich.-based company – but came to a head on July 9, when the Wall Street Journal reported that a deal was imminent. As of morning trading on July 10, WK Kellogg’s share price had jumped over 30% to $22.83 after opening at $17.00.

WK Kellogg emerged when on Oct. 2, 2023, The Kellogg Co. officially split into two public companies: WK Kellogg Co (the North American cereal business) and Kellanova (the global snacking, international cereal and noodles, plant-based foods and North American frozen food businesses).

“We believe this proposed transaction maximizes value for our shareowners and enables WK Kellogg Co to write the next chapter of our company’s storied legacy,” said Gary Pilnick, chairman and chief executive officer of WK Kellogg. “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,” Pilnick explained. “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.”

Impetus for growth

At the time of the spinoff, WK Kellogg represented just 15% of the legacy Kellogg Co. business, or less than $3 billion in annual sales. Since then, WK Kellogg has struggled to spur growth. For fiscal 2024 ended Dec. 28, net sales fell 2% year over year to $2.71 billion, and adjusted net income was down 9.1%.

To improve its financial performance, the company has touted “optimize cereal” as its mission to drive sales and sharpen its marketing focus and, last August, announced a multiyear, half-billion-dollar supply chain modernization program to improve operations and boost margin growth. Yet in February at the 2025 Consumer Analyst Group of New York Conference, WK Kellogg highlighted licensing, distribution, mergers and acquisitions, and joint ventures as “potential growth structures” in its presentation. And Pilnick said inorganic growth for the company could “come in various forms.”

For Ferrero, WK Kellogg offers a line of household names, led by its “core 6” brands Kellogg’s Frosted Flakes, Special K, Raisin Bran, Froot Loops, Frosted Mini Wheats and Rice Krispies, which account for some 70% of sales. The product roster also includes the Next Core brands – Kellogg’s Corn Flakes, Apple Jacks, Corn Pops, Krave and All-Bran – as well as Kellogg’s Honey Smacks, Cracklin’ Oat Bran, Smart Start, Crispix, Mueslix, Vector and Extra cereals plus Kashi cereals and Bear Naked granola.

Ferrero said it “plans to invest in and grow WK Kellogg Co’s iconic brands,” noting that the cereal maker’s Battle Creek base “will remain a core location for the company” as Ferrero’s headquarters for North America cereal.

Photo: ©HELGAQ – STOCK.ADOBE.COM

Bigger portfolio of leading brands 

“WK Kellogg Co, a trusted company with beloved brands, represents a meaningful addition to the Ferrero Group,” said Lapo Civiletti, CEO of The Ferrero Group. “Enhancing our portfolio with these complementary household brands marks an important step towards expanding Ferrero’s presence across more consumption occasions and reinforces our commitment to delivering value to consumers in North America.”

Ferrero has acquired Kellogg Co. assets previously. In July 2019, the company closed a deal to buy Kellogg’s cookie, fruit and fruit-flavored snacks, ice cream cone and pie crust businesses for $1.3 billion. The transaction included brands like Keebler, Famous Amos, Mother’s, Murray’s, Stretch Island and Fruity Snacks.

One of the world’s largest packaged sweet food companies, Ferrero Group reported consolidated sales of €18.4 billion ($21.6 billion) for its most recently completed fiscal year. The company operates 37 manufacturing plants globally and sells its products in over 170 countries under more than 35 brands, such as Nutella, Kinder, Tic Tac and Ferrero Rocher.

In North America, Ferrero and its affiliated companies have 22 plants and 11 offices. The regional portfolio includes Nutella, Kinder, Tic Tac and Ferrero Rocher plus American brands like Butterfinger, Keebler and Famous Amos. It also includes confectionery brands such as Jelly Belly, Nerds and Trolli, along with frozen novelty brands like Blue Bunny, Bomb Pop and Halo Top.

With the acquisition announcement, WK Kellogg gave a preview of fiscal 2025 second-quarter results. The company pegs net sales at $610 million to $615 million and adjusted EBITDA at $43 million to $48 million for the quarter ended June 28. WK Kellogg said it will report full results for the period on Aug. 5.

Ferrero’s deal to acquire WK Kellogg reflects competitive ripples stirred by Mars Inc.’s $35.9 billion deal to acquire Kellanova. That transaction, announced in August 2024, has been cleared by the US Federal Trade Commission but is currently under review by the European Commission.