Nutella maker Ferrero Group is buying cereal giant WK Kellogg Co in a $3.1 billion deal.
Shares of WK Kellogg (KLG) jumped more than 30% in premarket trading. Ferrero said that it “plans to invest in and grow” the Kellogg business, which includes 14,000 employees and 22 plants.
The sale comes at a volatile time for the snack industry, as consumer preferences are changing: Buyers are pulling back spending in response to higher prices, and they’re also shifting to private labels.
WK Kellogg’s CEO Gary Pilnick faced backlash last year after he suggested that customers eat cereal for dinner given skyrocketing food prices.
In a press release, Pilnick said the Ferrero deal will bring Kellogg “greater resources and more flexibility to grow our iconic brands in this competitive and dynamic market,” and that the companies would “explore opportunities beyond cereal” as well.
WK Kellogg is Ferrero’s most substantial acquisition so far, with a market cap of roughly $1.5 billion and a portfolio of household-name cereals including Raisin Bran, Corn Flakes and Apple Jacks. Ferrero also bought Nestlé’s US business and Blue Bunny ice cream in recent years.
Ferrero, meanwhile, makes a number of sweet treats including Baby Ruth candy bars, Kinder chocolates, Keebler and Famous Amos cookies, as well as its namesake Ferrero Rocher chocolates.
WK Kellogg became its own company in 2022, when Kellogg announced it was spinning off its cereal business — a major shakeup for the more-than-century-old company. Its snack unit was renamed Kellanova. Kellogg said at the time that separating the companies would “better position each business to unlock its full potential.”
CNN’s Ramishah Maruf contributed to this report.
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