Italian confectionery giant Ferrero Group is acquiring U.S. cereal maker WK Kellogg Co. for approximately $3.1 billion, in a move that expands the privately held company’s growing presence in the North American market, reported AP. The deal, announced Thursday, will see Ferrero pay $23 per share for WK Kellogg, whose portfolio includes legacy cereal brands such as Corn Flakes, Frosted Flakes, Special K, and Rice Krispies. The acquisition includes six manufacturing plants and covers marketing and distribution operations across the U.S., Canada, and the Caribbean.
WK Kellogg shares rose 31% in mid-afternoon trading following the announcement. The company was originally founded in 1906 in Battle Creek, Michigan, after founder W.K. Kellogg developed the first flaked cereal while experimenting with granola. Today, WK Kellogg employs around 3,000 people and operates plants in Michigan, Pennsylvania, Tennessee, Nebraska, Canada, and Mexico.
The current iteration of the company was established in 2023, when Kellogg split into two entities. Snack brands including Cheez-Its and Pringles became part of Kellanova, which itself is set to be acquired by Mars Inc. in a separate $30 billion deal announced last year.
The WK Kellogg acquisition is Ferrero’s latest in a string of North American purchases. In 2018, it acquired Nestlé’s U.S. candy brands, including Butterfinger, Nerds, and SweeTarts. In 2022, it bought Wells Enterprises, the maker of Blue Bunny and Halo Top ice cream.
“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.,” Ferrero Executive Chairman Giovanni Ferrero said in a statement. “Today’s news is a key milestone in that journey, giving us confidence in the opportunities ahead.”
WK Kellogg Chairman and CEO Gary Pilnick said the deal will provide the scale and resources to grow the business and evolve its portfolio. “The combination with Ferrero presents a tremendous opportunity to advance our strategic growth plans, while also continuing to deliver for customers and consumers,” Pilnick said. “Ferrero has a successful track record of growing brands and businesses and shares our commitment to people and to the communities in which we operate.”
The cereal category has faced challenges in recent years as U.S. consumers increasingly opt for other breakfast formats, such as protein bars and ready-to-drink shakes. Sales surged briefly during the pandemic when more families ate breakfast at home, but volumes have since continued to decline.
As of early July, cold cereal sales in the U.S. were down 6% compared to the same period in 2022, according to NielsenIQ. WK Kellogg reported net sales of $2.7 billion in 2024, a 2% drop from the previous year.
Despite those headwinds, Ferrero sees strategic value in WK Kellogg’s large-scale distribution footprint and relationships with major grocery chains across North America.
“Cereal is a declining category, but distribution is everything,” said Brad Haller, senior partner for mergers and acquisitions at consulting firm West Monroe. “That’s what Ferrero is buying—negotiating power and better shelf placement across North America.”
The move also signals Ferrero’s interest in extending beyond its core categories of sweets and snacks. However, Haller noted that the company could still streamline operations. “As Americans, these brands are iconic and beloved by us, but a European company buying these wouldn’t have the same nostalgia,” he said.
WK Kellogg has also faced operational challenges in recent years, including a nearly three-month strike at its U.S. cereal plants in 2021. Last fall, the company also faced public pressure to eliminate artificial dyes from its cereals. In response, Kellogg pledged to reformulate products sold to schools and to exclude artificial dyes from any new cereals beginning in 2025.
The acquisition still requires approval from WK Kellogg shareholders and is expected to close in the second half of the year. Once finalised, Kellogg’s stock will be delisted from the New York Stock Exchange, and the company will operate as a subsidiary of Ferrero Group.