Ferrero is taking the cereal company WK Kellogg private in a deal valued at USD 3.1 billion. Ferrero is known for brands like Nutella and Butterfinger.
For each Kellogg share, the Ferrero Group will pay USD 23. Manufacturing, marketing and distribution of WK Kellogg Co's portfolio of breakfast cereals are included in the transaction. This will happen across the United States, Canada and the Caribbean.
Kellogg's brands include Fruit Loops, Special K, Frosted Flakes and Rice Krispies. In the second half of the year, the deal is expected to close. However, this deal still needs approval from Kellogg shareholders. Kellogg's stock will no longer trade on the New York Stock Exchange after the transaction is complete. The company will become a Ferrero subsidiary.
People on X (formerly Twitter) had a lot of mixed reactions.
An X user stated, "Today, the market will be affected by diabetes. Italian company Ferrero produces delicious chocolates in golden wrappers. The same company that makes Nutella is set to buy America's biggest cereal company Kellogg's, for $3 billion." He further mentioned the KLG shares.
Another X user stated, "Another American icon goes away: Italian candy maker behind Ferrero Rocher and Nutella is nearing a roughly $3 billion deal to buy the breakfast-cereal conglomerate Kellogg's. via the WSJ."
According to AP News, Kellogg was founded in Battle Creek, Michigan, in 1906 after its founder accidentally figured out how to make flaked cereal while he was experimenting with granola. Kellogg still makes Corn Flakes, as well as Froot Loops, Special K, Frosted Flakes, Rice Krispies and other cereals.
Kellogg now has four U.S. plants, which are located in Michigan, Pennsylvania, Tennessee and Nebraska. It also has a plant in Mexico and a plant in Canada. The company has around 3,000 employees.
“Over recent years, Ferrero has expanded its presence in North America, bringing together our well-known brands from around the world with local jewels rooted in the U.S. Today’s news is a key milestone in that journey, giving us confidence in the opportunities ahead,” Ferrero Executive Chairman Giovanni Ferrero said in a statement.
