Ferrero Group to Acquire WK Kellogg Co. for $3 Billion Amid Declining Cereal Sales
Ferrero Group is set to acquire WK Kellogg Co. for $3 billion, aiming to enhance its U.S. market presence as cereal sales decline.
Overview
- Ferrero Group is acquiring WK Kellogg Co. for approximately $3 billion, a major deal in the food industry.
- The acquisition includes Kellogg's manufacturing plants and distribution networks in the U.S., Canada, and the Caribbean.
- Kellogg's shares surged by 31% following the acquisition announcement, reflecting investor optimism.
- The deal comes as Kellogg faces a 2% drop in net sales, attributed to declining cereal consumption in the U.S.
- The acquisition is expected to close in the second half of 2023, pending approval from Kellogg shareholders.
Report issue
Read both sides in 5 minutes each day
Analysis
Center-leaning sources frame Ferrero's acquisition of WK Kellogg as a significant business move, highlighting both the financial aspects and the historical context of Kellogg. They express a cautious optimism about Ferrero's expansion in the U.S. market while acknowledging Kellogg's struggles, reflecting a nuanced perspective on corporate transitions.
"Kellogg’s large distribution network and relationships with grocery chains in North America is appealing to Ferrero because it would help the European company negotiate pricing and positioning for its products."
Fortune"The purchase also helps Ferraro expand beyond snacks and sweets and into a meal category, Haller said."
ABC News"The purchase also helps Ferraro expand beyond snacks and sweets and into a meal category, he said."
Chicago Sun-Times"The $3.1 billion deal will also provide some financial breathing room to Kellogg."
CBS News"The deal, worth roughly $3 billion, will expand Ferrero’s footprint in the North American market."
Fortune"Joining Ferrero will provide WK Kellogg Co with greater resources and more flexibility to grow our iconic brands in this competitive and dynamic market."
NPR"The acquisition is set to bring the publicly traded maker of Froot Loops, Frosted Flakes and Rice Krispies under the privately owned Italian manufacturer of Nutella, Tic Tacs and Kinder chocolates."
NBC NewsArticles (11)
Center (7)
FAQ
The total enterprise value of the acquisition is approximately $3.1 billion.
Ferrero will acquire WK Kellogg Co.'s iconic portfolio of breakfast cereals, including brands like Froot Loops, Rice Krispies, and Frosted Flakes.
The acquisition supports Ferrero's portfolio expansion and growth in North America by adding highly complementary cereal brands, enhancing its reach across more consumption occasions.
History
- 20d6 articles