Italian chocolate giant Ferrero is making a big move into the U.S. breakfast aisle by agreeing to buy WK Kellogg, the iconic cereal company behind Froot Loops and Frosted Flakes, in a deal valued at $3.1 billion.
The purchase price of $23 per share represents a 31% premium over WK Kellogg’s stock closing price on Wednesday, and the announcement sent shares soaring 30% in early Thursday trading. The deal is expected to close in the second half of this year, pending approval from shareholders and regulators.
WK Kellogg became its own company in 2023 after splitting from the original Kellogg business, which rebranded as Kellanova to focus on snacks like Pringles and Cheez-It. That shift was part of a broader industry trend away from traditional sugary cereals, as American consumers gravitate toward healthier breakfast options or more affordable private-label products.
Ferrero, best known for Nutella, Ferrero Rocher, and Kinder, has been steadily growing its footprint in North America. The company previously acquired Nestlé’s U.S. candy business and the maker of Halo Top ice cream. It’s now the third-largest candy company in the U.S. and is continuing to adapt its portfolio for American tastes, recently launching peanut Nutella and Dr Pepper-flavoured Tic Tacs.
This latest move into cereals shows Ferrero’s commitment to broadening its reach in the U.S. packaged food market. Executive chair Giovanni Ferrero called the acquisition a “key milestone” in their North American expansion strategy.
While WK Kellogg has struggled with slowing sales, its shares were down more than 2% in 2024 before the deal; the brand still holds deep nostalgic value for U.S. consumers. The company expects second-quarter net sales between $610 million and $615 million, with adjusted earnings in the $43–$48 million range, but has cancelled its usual earnings call due to the pending acquisition.
If completed, this deal marks yet another major consolidation in the food industry, as legacy brands look to stay relevant in a changing consumer landscape.