Ferrero to buy cereal maker WK Kellogg for $3.1 billion; Kellogg shares jump 30%

Chocolate shaper Ferrero has agreed to bargain cereal elephantine WK Kellogg successful a woody valued astatine $3.1 billion.

Shares of WK Kellogg soared 30% successful premarket trading connected the announcement. Excluding Thursday's banal move, shares person fallen much than 2% this year, dragging the company's marketplace worth down to astir $1.5 billion.

WK Kellogg, which makes U.S. puerility staples specified arsenic Froot Loops and Frosted Flakes, spun off into a standalone institution successful 2023 arsenic Kellogg sought to absorption much connected its increasing snack concern and divest from the sleepy cereal category. Kellogg renamed itself to Kellanova, which present houses snack brands specified arsenic Pringles and Cheez-It. M&M proprietor Mars agreed to bargain Kellanova for $36 cardinal past twelvemonth successful a woody that has not yet closed.

A Ferrero acquisition of WK Kellogg adds to consolidation successful packaged foods. Many American consumers person shunned sugary cereals successful favour of meal options considered healthier, and different shoppers moved to backstage statement brands aft ostentation spiked successful caller years.

The determination deepens Ferrero's ambitions successful the U.S. market. The Italian family-owned institution has been connected a North American buying spree successful caller years, snapping up Nestle's U.S. candy concern and Halo Top proprietor Wells Enterprises, among others.

The third-largest U.S. candy institution successful May announced a caller slate of products to entreaty to American consumers, including peanut Nutella and Dr Pepper Tic Tacs.

"Over caller years, Ferrero has expanded its beingness in North America, bringing unneurotic our well-known brands from astir the satellite with section jewels rooted successful the U.S.," Ferrero Group enforcement seat Giovanni Ferrero said successful a statement. "Today's quality is simply a cardinal milestone successful that journey, giving america assurance successful the opportunities ahead."