Battle Creek cereal maker WK Kellogg Co. is on the verge of being sold to Italian candy maker Ferrero for a reported $3 billion, according to multiple news outlets, including Reuters and The Wall Street Journal.
Shares of the 118-year-old company, with an estimated market value of $1.5 billion, jumped 55 percent when the news broke.
Neither company has commented on the potential transaction, which follows the October 2023 split of Kellogg’s into independent companies — one making cereal like Frosted Flakes, Froot Loops, Rice Krispies, and others (WK Kellogg Co.), and one producing non-cereal products such as Pop-Tarts, Rice Krispies Treats, Eggo, and more (Kellanova).
Kellanova is being acquired by candy maker Mars in a $36 billion deal initiated last year.
Ferrero, which recently has started buying up American brands, owns Tic Tac and Kinder in North America. It also has acquired Wells Enterprises, maker of Blue Bunny and other ice-cream brands, and bought Nestle’s U.S. chocolate business for $2.8 billion. Ferrero now has 15 plants and warehouses across the U.S., Canada and the Caribbean, employing more than 5,100 people, according to reports.
“For Ferrero, this deal presents an opportunity to diversify beyond confectionery and deepen its presence in the U.S. market,” CFRA Research Analyst Arun Sundaram told Reuters. “Since the spinoff and rebrand from Kellogg Co., both WK Kellogg and Kellanova have delivered shareholder value by becoming acquisition targets.”
WK Kellogg and other packaged food companies reportedly are facing weakening demand due to cautious consumer spending in the U.S. following price increases due to rising raw material and production costs.
Packaged food makers also are under pressure from Health Secretary Robert F. Kennedy Jr.’s Make America Healthy Again Commission to eliminate the use of synthetic dyes.
