Italy’s Ferrero agrees to buy Kellogg in $3.1-billion deal

Ferrero International has agreed to acquire WK Kellogg Co. for an enterprise value of $3.1 billion, pushing the Italian family-owned candy business further into the lucrative U.S. market.

Ferrero will pay $23 per Kellogg share in cash, according to a statement Thursday, representing a premium of about 31% from Kellogg’s closing price on Wednesday.

The deal combines the maker of chocolate nut spread Nutella with the company behind Froot Loops and Frosted Flakes cereals, expanding Ferrero’s empire of comfort foods and diversifying its chocolate-heavy portfolio at a time of higher cocoa prices.

Shares in WK Kellogg rallied 31% to $22.86, slightly below the offer price from Ferrero.

Controlled by the low-profile billionaire Giovanni Ferrero, the grandson of the founders, the confectionery company has been on an acquisition spree to push harder into the U.S., targeting brands often in the crosshairs of health regulators and changing consumer trends. Ferrero, which reported a 9% jump in sales to 18.4 billion euros ($21.6 billion) last year, most recently bought Bomb Pops ice cream maker in 2022.

Joining forces with Kellogg will continue Ferrero’s strategy of “bringing together our well-known brands from around the world with local jewels in the U.S.,” Giovanni Ferrero said in the statement. Ferrero will invest in and grow key Kellogg brands like Frosted Flakes and Rice Krispies and “more that are well-loved by American consumers.”

The takeover by Ferrero could boost a business that’s been struggling to grow since Kellogg Co. was split in two, with the snacking business rebranded Kellanova and the cereal brands under WK Kellogg.

The acquisition will give Ferrero “scale and a stronger U.S. foothold,” according to Bloomberg Intelligence analysts led by Jennifer Bartashus.

While Kellogg’s growth potential is limited, it offers “cash flow and brand consolidation,” they wrote in a research note, adding that Kellogg has “struggled with weak volume in a shrinking North American cereal market.”

In May, Kellogg cut its annual sales guidance, with Chief Executive Gary Pilnick calling out a “challenging operating environment” as consumers move away from sugary foods and gravitate toward cheaper, private-label cereal options. The company expects sales to fall to between $610 million and $615 million in the second quarter, according to preliminary figures released Thursday, down from $663 million in the first quarter.

Pilnick said joining Ferrero will provide Kellogg with greater resources and more flexibility to grow its brands. Battle Creek, Mich., will remain a core location for the company, he added, and will be Ferrero’s headquarters for the North America cereal division.

Consolidation among consumer goods companies has been a trend for some time as businesses have grappled with inflation and surging commodity costs, with cocoa prices almost tripling since 2023. More recently, President Trump’s tariff war has created further headaches for companies that often operate on slim margins.

Ferrero, which also makes Kinder Bueno chocolates and Tic Tac mints, traces its fortune to a pastry shop in Italy owned by Giovanni’s grandparents Piera and Pietro, who used hazelnuts to stretch limited cocoa supplies. It was under Michele, Giovanni’s father, that the business grew into a global powerhouse starting in the 1950s.

The transaction is expected to close in the second half of 2025. The agreement has been unanimously approved by Kellogg’s board.

The WK Kellogg Foundation Trust and the Gund Family have agreed to sell their 21.7% stake in the firm, according to the statement.

Tse and Baker write for Bloomberg.