Global snack giant expands U.S. reach with cereal acquisition
Ferrero, the Italian confectionery powerhouse behind Nutella and Ferrero Rocher, announced Thursday it will acquire WK Kellogg for $3.1 billion, or $23 per share. The deal brings iconic cereal brands like Frosted Flakes and Froot Loops under the same corporate roof as Kinder, Tic Tac, and Blue Bunny ice cream.
The acquisition marks Ferrero’s biggest move since its 2018 purchase of Nestlé’s U.S. chocolate business. The company continues to aggressively grow its North American presence, with Executive Chairman Giovanni Ferrero calling the deal a “key milestone” in their expansion strategy.
WK Kellogg shares surged nearly 30% to trade just below the buyout price, after rising by as much as 50% the previous day following reports of a pending deal. The acquisition is expected to close in the second half of 2025.
WK Kellogg struggles amid cereal category decline
The deal follows a challenging stretch for WK Kellogg, which was spun off from Kellogg Company in 2023. In its latest quarterly earnings, WK Kellogg reported a 6.2% drop in net sales to $663 million and a 45.5% decline in net income to $18 million. The company also lowered its full-year guidance, projecting sales to fall by up to 3% and earnings to remain flat or slightly negative.
According to Stifel analyst Matthew Smith, cereal category sales dropped 1.8% in the four weeks ending June 29, with WK Kellogg’s sales down 5.7%. Smith added that post-pandemic comparisons may worsen trends, noting that “volumes are likely to continue to move towards the historical decline rate.”
Ferrero is betting that its marketing power and product innovation can revitalize WK Kellogg’s brand portfolio, while gaining valuable shelf space in American grocery stores.
Deal part of broader food industry M&A wave
The WK Kellogg acquisition is the latest in a flurry of food industry consolidation. Ferrero itself recently purchased Wells Enterprises, maker of Blue Bunny ice cream, and is now adding breakfast cereals to its expanding U.S. empire.
Meanwhile, Mars is preparing a nearly $36 billion buyout of Kellanova — the other half of Kellogg’s 2023 split — which includes snack brands such as Pop-Tarts and Cheez-Its. PepsiCo has also been active, acquiring Siete Foods and Poppi soda for a combined $3.15 billion earlier this year.
This wave of deal-making reflects the sector’s need to adapt as consumers shift toward healthier options and manufacturers face rising input costs. For Ferrero, the WK Kellogg deal provides both scale and strategic diversification away from its cocoa-heavy base.
