Ferrero, the Italian confectionery powerhouse best known for Nutella and Tic Tacs, is set to acquire American cereal heavyweight WK Kellogg in a $3.1 billion deal. The agreement, announced Thursday, would marry Ferrero's sweets empire with the maker of childhood cereal staples like Frosted Flakes, Froot Loops, and Rice Krispies—a move that signals Ferrero's growing appetite for North America's breakfast market, the New York Times reports. Ferrero, a family-owned company founded in 1946, is the world's third-largest chocolate confectionery company, with brands including Butterfinger, Baby Ruth, and Kinder, reports the Wall Street Journal.
The news sent WK Kellogg's shares soaring 30% in early trading, moving close to the agreed buyout price. The deal appears unlikely to face major regulatory pushback, according to food industry experts, since Ferrero's strengths are in candy rather than cereal. It's a bright spot in an otherwise sluggish year for food industry mergers, slowed by shaky trade policies and cautious shoppers. With grocery prices climbing for nearly two years, many consumers have traded down to cheaper, store-brand cereals, contributing to WK Kellogg's recent dip in sales and an outlook projecting up to a 3% drop this year.
CEO Gary Pilnick said joining Ferrero means access to more resources and flexibility to grow its "iconic brands" in a tough market. WK Kellogg, which only spun off from the larger Kellogg Company in 2023, is aiming for a fresh start. The Kellogg Company, which was renamed Kellanova, kept control of brands including Pringles, Cheez-It, and Eggo. Last year, it was acquired by a different confectionary giant. American regulators cleared the $35.9 billion acquisition by Mars—maker of brands including M&M's and Snickers—last month, but European antitrust regulators are still investigating the deal, reports Reuters.
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