The Ferrero Group, a worldwide corporation with headquarters in Italy, has agreed to pay $3.1 billion to acquire Kellogg, a century-old American cereal firm.
The Italian confectioner is making the move as part of its aim to increase sales and broaden its customer base throughout North America.
In addition to Nestle’s U.S. candy brands, such as Butterfinger, Nerds, and SweeTarts, Ferrero announced on Thursday that it will expand its North American portfolio, which already includes Nutella, Kinder, Tic Tac, and Ferrero Rocher, to include iconic American cereal brands, such as Corn Flakes, Froot Loops, Frosted Mini Wheats, Raisin Bran, and Rice Krispies.
In a statement, Giovanni Ferrero, executive chairman of the Ferrero Group, said, “This is more than just an acquisition; it represents the coming together of two companies, each with a proud legacy and generations of loyal consumers.”
Gary Pilnick, CEO of WK Kellogg, went on to say that the deal will allow Kellogg’s to create the next chapter in its illustrious history.
According to the terms of the deal, Ferrero can purchase all of WK Kellogg Co.’s outstanding shares for $23 in cash per share. Following the ratification of that deal by Kellogg’s shareholders, the company will become a Ferrero subsidiary and stop trading on the New York Stock Exchange.
It is anticipated that the deal will finalize before the year is over.
Founded in 1906 in Michigan, Kellogg’s has been dealing with a long-term drop in cereal consumption in the United States. In May, the company reported a 6.2% drop in first-quarter sales compared to the previous year. Pilnick gave investors reassurance that Kellogg’s was moving quickly to implement its adaptation plans in a market where consumers are still prioritizing nutrition and health.
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