Chocolate giant Ferrero is making a major splash in the U.S. market by agreeing to purchase cereal powerhouse WK Kellogg in a deal valued at $3.1 billion, the companies announced Thursday.
WK Kellogg shares skyrocketed 30% in premarket trading following the news. Despite a modest decline earlier this year, the $23-per-share acquisition price represents a 31% premium over Wednesday’s closing price, reflecting strong investor enthusiasm.
The deal, expected to close later this year pending regulatory and shareholder approval, marks a significant move for Ferrero as it continues its North American expansion, adding iconic cereal brands like Froot Loops and Frosted Flakes to its portfolio.
“Over recent years, Ferrero has expanded its presence in North America, bringing together our well-known brands from around the world with local jewels rooted in the U.S.,” said Ferrero Group executive chair Giovanni Ferrero. “Today’s news is a key milestone in that journey, giving us confidence in the opportunities ahead.”
The combination with Ferrero would give WK Kellogg “greater resources and more flexibility to grow our iconic brands in this competitive and dynamic market,” Gary Pilnick, chief executive of WK Kellogg, said in a statement.
WK Kellogg, spun off as a standalone company in 2023 to allow parent Kellogg (now Kellanova) to focus on snacks, has faced challenges as consumers shift away from sugary cereals toward healthier or private-label options. The acquisition adds to ongoing consolidation in the packaged foods industry.
Ferrero’s recent North American buys include Nestlé’s U.S. candy business and Wells Enterprises, owner of Halo Top, showcasing the company’s aggressive growth strategy. The candy maker also recently unveiled new products tailored to American tastes, such as peanut Nutella and Dr Pepper Tic Tacs.
WK Kellogg is set to report quarterly results on August 5 but will skip the conference call due to the pending deal. Preliminary figures released Thursday project net sales between $610 million and $615 million, with adjusted EBITDA estimated between $43 million and $48 million.
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