Italy’s Ferrero, owner of renowned brands like Ferrero Rocher and Nutella, has reached a $3.1 billion agreement to acquire WK Kellogg, bringing some of the world’s most recognized consumer brands under one roof.
The acquisition of WK Kellogg by Ferrero reflects an industry trend of consolidation as food brands contend with a challenging consumer spending environment, marked by inflation and a shift towards healthier options.
State of play: The deal comes amidst increased deal activity in the snacking sector, where companies face pressure from rising input costs and changing consumer preferences, with Kellanova, another entity spun off from Kellogg Company, also undergoing acquisition by Mars in a hefty $36 billion deal.
- WK Kellogg’s shares surged by 30.6% to $22.85 upon news of the acquisition, aligning closely with Ferrero’s $23 per share offer, and the transaction will see iconic products like Froot Loops, Special K, and Frosted Flakes joining Ferrero’s portfolio alongside Nutella and Kinder.
- The acquisition comes at a pivotal time in the industry, as companies confront challenges such as surging cocoa prices, uncertainties stemming from fluctuating trade policies, and pressure to adapt to evolving health and ingredient regulations.
- The move reinforces Ferrero’s expansion efforts following its acquisition of Nestle’s U.S. confectionery business for $2.8 billion in 2018 and aligns with its goal of broadening manufacturing capabilities and market presence across various product categories.
