Cereal giant WK Kellogg in $3B deal to be acquired by Ferrero Rocher owner

WK Kellogg on Thursday agreed to be bought by the owner of Ferrero Rocher in a deal worth around $3.1 billion, as the cereal maker has been struggling with weakening consumer demand due to persistently high inflation.

Deal making in the snacking space has picked up pace as food brands battle muted sales in the wake of price hikes owing to higher input costs and a shift in consumer preference for healthier options.

Ferrero has offered WK Kellogg’s shareholders $23 per share, representing a 31% premium to the stock’s last close.

Shares of the cereal maker were up 30% at $22.84 on Thursday.

The deal, which is Ferrero’s biggest acquisition in recent years, brings legacy brands such as Nutella, Kinder, Tic Tac, Frosted Flakes, Froot Loops and Special K under one roof.

News outlets, including Reuters, reported late on Wednesday that the candy maker behind Nutella was nearing a deal to buy WK Kellogg.

The transaction is expected to close in the second half of 2025.

WK Kellogg was spun off from Kellanova and holds the North American cereal business of Kellogg, the original parent.

Cheez-It maker Kellanova is also in the process of being acquired by candy giant Mars in a nearly $36 billion deal.

WK Kellogg and other packaged food companies such as J.M. Smucker, Kraft Heinz and PepsiCo have flagged subdued demand due to cautious consumer spending in the US following consistent price increases by firms trying to navigate higher input costs.

The Raisin Bran owner said it expects second-quarter net sales to be in the range of $610 million to $615 million, below analysts’ average estimate of $653.7 million, according to data compiled by LSEG. It also projected adjusted core profit between $43 million and $48 million.

Packaged food makers are also under pressure from Health Secretary Robert F. Kennedy Jr.’s Make America Healthy Again Commission to eliminate the use of synthetic dyes.

The maker of Nutella hazelnut spread, Ferrero, has turned into a global group, boosted by the aggressive acquisition campaign launched by its Executive Chairman Giovanni Ferrero.

In 2018, Ferrero bought Nestle’s US confectionery business for $2.8 billion.

The group reported revenue of 18.4 billion euros ($19.2 billion) in the financial year ending on Aug. 31 and said it had increased its investments to boost manufacturing capabilities and expand across categories.