WK Kellogg has agreed to be acquired by the owner of Ferrero Rocher in an operation valued at approximately 3,100 million dollars. The transaction is scheduled to close during the second half of 2025.
The movement comes at a time when the cereal manufacturer faces a drop in demand by consumers, mainly attributed to persistent inflation and generalized food increase.
Brands are reacting to moderate sales by the increase in costs and the change in consumption preferences
The operation represents a significant step within the Snacks and Processed Food Sector, where the rhythm of mergers and acquisitions has accelerated in recent years. Brands are reacting to moderate sales, affected by both the increase in production costs and by the change in consumer preferences towards healthier options.
As part of the agreement, Ferrero has offered $ 23 per share to WK Kellogg shareholders, which represents a 31% premium compared to the closing price of the shares last Wednesday. After knowing the news, WK Kellogg titles rose 30% in operations prior to the opening of the market, quoting at $ 22.7.
The operation, which constitutes Ferrero’s greatest acquisition in recent yearswill allow to gather under the same umbrella to some of the most recognized brands in the global food market, such as Nutella, Kinder, Frosted Flakes, Froot Loops or Special K.
WK Kellogg was split from Kellanova And he currently manages the Kellogg cereal business in North America, which originally belonged to the parent company. For its part, Kellanova-known by products such as Cheez-Ite-has been recently acquired by Mars in an operation valued at about 36,000 million dollars.
Like other companies in the packaged food sector, WK Kellogg has alerted on a moderate demand, in a context of spending contained by US consumers, due to successive price increases implemented by companies to face the increase in inputs costs.
To this pressure is added the normative scrutiny. Food brands have been the subject of recommendations by the Commission “Make America Healthy Again”led by Health Secretary Robert F. Kennedy Jr., who urges to eliminate the use of synthetic dyes in products, among other measures.
The purchase of WK Kellogg is a new step within Ferrero’s expansion strategy, which has accelerated its global growth in recent years under the leadership of its executive president, Giovanni Ferrero. In 2018, the company acquired the confectionery business of Nestlé in the United States for 2.8 billion dollars.
