Shares of WK Kellogg, the company that makes Froot Loops and Frosted Flakes, jumped 50% after a report by the Wall Street Journal said Ferrero, best known for Nutella and Ferrero Rocher, was close to buying the company for $3 billion. The deal could be finalised this week.
The Wall Street Journal stated that Ferrero would acquire WK Kellogg for $3 billion. This could be Ferrero’s biggest buy so far. The company was founded in the 1940s in Italy and has since expanded into North America.
In 2022, Ferrero bought Wells Enterprises, a US ice cream company that owns Blue Bunny and Blue Ribbon. It also purchased Nestlé’s US chocolate business. Now, buying WK Kellogg would add more well-known cereal brands, such as Raisin Bran, Corn Flakes, and Apple Jacks, to its list.
WK Kellogg has a market value of about $1.5 billion. Last year, Ferrero made 18.4 billion euros in revenue. Neither Ferrero nor WK Kellogg commented on the report.
In 2022, Kellogg decided to split its business. It kept the snack side and renamed it Kellanova. The goal was to allow each business to grow at its own pace. Kellanova has also grown through other deals.
Last year, Mars bought Kellanova for $35.9 billion. If Ferrero’s deal happens, it would be another major change in the snack market. Shoppers are adjusting their spending habits and reducing their purchases due to high prices.
WK Kellogg’s CEO, Gary Pilnick, faced backlash last year when he said people could eat cereal for dinner. This was during a time when food prices were very high.
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