Nutella maker Ferrero to acquire WK Kellogg for $3.1bn

Deal announced arsenic cereal elephantine Kellogg struggles arsenic user request slows owed to inflation.

The Ferrero Group volition get United States cereal marque WK Kellogg for astir $3.1bn arsenic the second struggles with weakening user request and inflationary pressures.

Kellogg and Ferrero announced the woody connected Thursday.

Deal making successful the snack manufacture has picked up gait arsenic nutrient brands conflict muted income successful the aftermath of terms hikes owing to higher input costs and a displacement successful user penchant for healthier options.

Ferrero has offered WK Kellogg’s shareholders $23 per share, representing a 31 percent premium implicit the stock’s past close. Shares of the cereal shaper were up 30.4 percent astatine $22.84 successful aboriginal trading connected Thursday.

The deal, which is Ferrero’s biggest acquisition successful caller years, volition bring bequest brands specified arsenic Nutella, Kinder, Tic Tac, Frosted Flakes, Froot Loops and Special K nether 1 roof.

The transaction is expected to adjacent successful the 2nd fractional of 2025.

WK Kellogg was spun disconnected from Kellanova and holds the North American cereal concern of Kellogg, the archetypal parent. Cheez-It shaper Kellanova is besides successful the process of being acquired by the candy elephantine Mars successful a astir $36bn deal.

WK Kellogg and different packaged nutrient companies specified arsenic JM Smucker, Kraft Heinz and PepsiCo person flagged subdued request owed to cautious user spending successful the US aft accordant terms increases by firms trying to navigate higher input costs.

The Raisin Bran proprietor said it expects second-quarter nett income to beryllium successful the scope of $610m to $615m, beneath analysts’ mean estimation of $653.7m, according to information compiled by LSEG. It besides projected adjusted halfway nett of $43m to $48m.

Packaged nutrient makers are besides nether unit from US Health and Human Services Secretary Robert F Kennedy Jr’s Make America Healthy Again Commission to eliminate the usage of synthetic dyes.

Ferrero, the shaper of the Nutella hazelnut spread, has turned into a planetary group, boosted by an assertive acquisition run launched by Executive Chairman Giovanni Ferrero. In North America, Ferrero has 14,000 employees crossed 22 plants and 11 offices.

In 2018, Ferrero bought Nestle’s US confectionery concern for $2.8bn.

The radical reported turnover of 18.4 cardinal euros ($19.2bn) successful the fiscal twelvemonth ending connected August 31 and said it had accrued its investments to boost manufacturing capabilities and grow crossed categories.

On Wall Street successful New York arsenic of 11am (15:00 GMT), Kellogg’s banal was up astir 0.2 percent since the marketplace opened. The banal has trended downward implicit the past period amid its struggles, down astir 2.5 percent.