Nutella maker Ferrero to acquire WK Kellogg for $3.1bn

The Ferrero Group will acquire United States cereal brand WK Kellogg for roughly $3.1bn as the latter struggles with weakening consumer demand and inflationary pressures.

Kellogg and Ferrero announced the deal on Thursday.

Deal making in the snack industry has picked up pace as food brands battle muted sales in the wake of price hikes owing to higher input costs and a shift in consumer preference for healthier options.

Ferrero has offered WK Kellogg’s shareholders $23 per share, representing a 31 percent premium over the stock’s last close. Shares of the cereal maker were up 30.4 percent at $22.84 in early trading on Thursday.

The deal, which is Ferrero’s biggest acquisition in recent years, will bring legacy brands such as Nutella, Kinder, Tic Tac, Frosted Flakes, Froot Loops and Special K under one roof.

The transaction is expected to close in the second half of 2025.

WK Kellogg was spun off from Kellanova and holds the North American cereal business of Kellogg, the original parent. Cheez-It maker Kellanova is also in the process of being acquired by the candy giant Mars in a nearly $36bn deal.

WK Kellogg and other packaged food companies such as JM Smucker, Kraft Heinz and PepsiCo have flagged subdued demand due to cautious consumer spending in the US after consistent price increases by firms trying to navigate higher input costs.

The Raisin Bran owner said it expects second-quarter net sales to be in the range of $610m to $615m, below analysts’ average estimate of $653.7m, according to data compiled by LSEG. It also projected adjusted core profit of $43m to $48m.

Packaged food makers are also under pressure from US Health and Human Services Secretary Robert F Kennedy Jr’s Make America Healthy Again Commission to eliminate the use of synthetic dyes.

Ferrero, the maker of the Nutella hazelnut spread, has turned into a global group, boosted by an aggressive acquisition campaign launched by Executive Chairman Giovanni Ferrero. In North America, Ferrero has 14,000 employees across 22 plants and 11 offices.

In 2018, Ferrero bought Nestle’s US confectionery business for $2.8bn.

The group reported turnover of 18.4 billion euros ($19.2bn) in the financial year ending on August 31 and said it had increased its investments to boost manufacturing capabilities and expand across categories.