Ferrero Set to Acquire Legendary WK Kellogg Company for $3.1 Billion
In a significant move, Italian confectionery giant Ferrero has agreed to acquire WK Kellogg Co for $3.1 billion in cash, marking a new chapter for the American breakfast cereal company. The deal, announced on July 10, 2023, will see Ferrero pay $23.00 per share—a 40% premium over recent trading prices.
Founded in 1894 by W.K. Kellogg, who invented Corn Flakes, WK Kellogg Co is renowned for its iconic breakfast cereal brands such as Froot Loops, Frosted Flakes, Rice Krispies, and more, serving consumers across the United States, Canada, and the Caribbean.
Gary Pilnick, chairman and CEO of WK Kellogg Co., stated that the deal maximizes value for WK Kellogg's shareowners and enables the company to write the next chapter of its legacy. The acquisition is part of Ferrero’s strategic growth and expansion plan to strengthen its footprint and product offerings in North America, diversifying into new consumption occasions beyond confectionery.
Ferrero, which began as a pastry shop in Alba, Italy, in 1946, currently employs over 14,000 people in North America, operating 22 plants and 11 offices. The acquisition will add WK Kellogg’s complementary cereal portfolio to its existing products, which include confectionery, snacks, and frozen treats like Butterfinger, Keebler, Famous Amos, Jelly Belly, and Halo Top.
Looking ahead, Ferrero plans to leverage its global reach and operational strengths combined with WK Kellogg’s legacy brands to grow these cereals amidst evolving consumer preferences. The acquisition brings fresh capital, increased flexibility, and enhanced capabilities aimed at accelerating brand growth in a highly competitive food market and expanding into additional packaged food categories in North America.
The headquarters for North American cereal operations of WK Kellogg Co will remain in Battle Creek. The deal, expected to close in the latter half of 2025 pending approvals, will make WK Kellogg a wholly owned subsidiary of Ferrero, no longer publicly traded.
Ferrero's brands are sold in more than 170 countries, and the company's net sales decreased 6.2% in the first quarter on a year-over-year (YoY) basis, while net income declined 45.5% YoY. In contrast, WK Kellogg announced its preliminary second quarter net sales for 2025, which are expected to fall between $610 million to $615 million.
This acquisition is a key step in Ferrero’s broader strategy to expand into the cereal market and more broadly across North American food consumption occasions by investing in and growing iconic brands with strong consumer loyalty. The acquisition of Kellanova by Mars, another major player in the food industry, is expected to close by the end of 2025, after clearing U.S. regulatory hurdles.
References:
- Ferrero to Acquire WK Kellogg Co for $3.1 Billion
- Ferrero to Buy Kellogg Spinoff for $3.1 Billion
- Ferrero Agrees to Buy Kellogg's Cereal Unit for $3.1 Billion
- Ferrero to Acquire WK Kellogg Co: What It Means for the Cereal Market
- Ferrero to Acquire WK Kellogg Co: Implications for the Food Industry
In the realm of finance, this acquisition of WK Kellogg Co by Ferrero for $3.1 billion marks a significant shift in the business world, particularly within the food industry. As part of its strategic growth plan, Ferrero aims to strengthen its footprint and diversify its product offerings, expanding beyond confectionery to include cereals and other packaged food categories in North America.
