Ferrero Expands U.S. Reach with Kellogg Acquisition

Italian confectioner Ferrero is set to expand its influence in the North American market through a significant acquisition of the U.S. cereal giant WK Kellogg. The deal, worth approximately $3.1 billion, involves paying $23 per Kellogg share, showcasing Ferrero's ambitious plans to broaden its product offerings beyond confectionery.

Established in 1906, Kellogg has been a staple in American households, famous for brands such as Corn Flakes, Froot Loops, and Special K. However, the company has faced challenges as cereal consumption declined across the U.S, with consumers gravitating towards alternative breakfast options. Despite this trend, the leverage of Kellogg's extensive distribution network remains a key motivator for Ferrero's purchase.

This acquisition is part of Ferrero's strategic expansion. Having previously acquired Nestle's U.S candy brands and Wells Enterprises, the maker of Blue Bunny ice cream, Ferrero continues to diversify its portfolio. The transaction, pending shareholder approval, is projected to finalize in the latter half of the year, transitioning Kellogg into a Ferrero subsidiary, and delisting it from the New York Stock Exchange.

(With inputs from agencies.)