Ferrero, WK Kellogg Acquisition: How the $3.1B Deal Will Link Two Legacy Brands
The Ferrero Group, which manufactures such brands as Nutella, Keebler and Ferrero Rocher, will acquire WK Kellogg Co. in a $3.1 billion deal.
The transaction will include manufacturing, marketing and distribution for the breakfast cereal portfolio across the U.S., Canada and the Caribbean. This includes such brands as Frosted Flakes, Froot Loops, Frosted Mini Wheats, Special K, Rice Krispies, Raisin Bran, Kashi, Bear Naked and others.
Gary Pilnick, CEO of WK Kellogg, said in a statement that the transaction will provide the company with greater resources and more flexibility to grow the cereal brands — part of its journey to become a more focused and profitable business since becoming an independent public company in 2023.
Ferrero’s M&A strategy includes tapping into strong brand recognition and consumer relevance.
Ferrero’s Growth Track
Giovanni Ferrero, executive chairman of the Ferrero Group, said in a statement that the deal brings two legacy companies together, combining generations of loyal consumers. WK Kellogg has operated for nearly 120 years, and Ferrero was founded over 75 years ago.
"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.,” he added.
Also: Ferrero North America is now making chocolate outside of Europe
Earlier this year, Ferrero added the brand Power Crunch to its portfolio as part of efforts to expand in the better-for-you segment. This followed acquisitions of Fulfil and Eat Natural in Europe. The company also acquired candy brands Butterfinger, Baby Ruth and Crunch, and cookie brands Keebler, Famous Amos and Mother's from Nestlé in 2018, as well as Iowa-based ice cream company Wells Enterprises in 2022.
As a result of this ongoing growth, North America Ferrero and affiliated companies now account for more than 14,000 employees, 22 plants and 11 offices. Battle Creek, Michigan, will be Ferrero's headquarters for North America cereal.
CPG M&A - Where Kellanova Stands
In parallel with Ferrero’s expansion efforts, the broader consumer goods industry is undergoing major consolidation and portfolio optimization. Global confectionery and pet food giant Mars recently secured U.S. antitrust approval for its proposed $36 billion acquisition of Kellanova, the flip side of the Kellogg split that yielded the WK Kellogg independent business, and manufacturer of brands such as Pringles.
However, the deal is facing heightened scrutiny in Europe, where regulators have launched an investigation over concerns it could lead to higher prices for consumers. While Mars expressed satisfaction with the U.S. decision and noted that the deal has cleared all regulatory hurdles except in the EU, it still expects the transaction to close by late 2025.
