Italian confectionery giant Ferrero is in advanced talks to acquire WK Kellogg Co., the U.S.-based cereal maker behind iconic brands such as Froot Loops and Frosted Flakes, a source familiar with the matter told Reuters. The acquisition, reportedly valued at around $3 billion, could be finalized as early as this week.
Shares of WK Kellogg surged approximately 55% in after-hours trading following The Wall Street Journal’s report on the potential transaction. The deal would mark Ferrero’s most significant move yet in its ongoing campaign to diversify its portfolio and deepen its presence in the North American market.
Ferrero, best known for Nutella, Ferrero Rocher, and Kinder, has ramped up its U.S. expansion in recent years through a series of high-profile acquisitions. Under the leadership of Executive Chairman Giovanni Ferrero, the company has acquired Nestlé’s U.S. chocolate business for $2.8 billion, bought the maker of Blue Bunny ice cream (Wells Enterprises), and secured various brands from Kellogg Company, including Keebler and Famous Amos, in a $1.3 billion transaction in 2019.
In that earlier deal, Ferrero also took over fruit snacks (e.g., Stretch Island), ice cream cones, pie crusts, and six U.S.-based manufacturing facilities, reinforcing its North American supply chain.
Now, with WK Kellogg in its sights, Ferrero appears poised to step beyond its confectionery and snack roots into the broader cereal market—one that is facing both challenges and opportunities.
A Legacy Brand at a Crossroads
WK Kellogg, which spun off from the larger Kellogg Company in 2023, has been navigating headwinds in recent quarters. Facing waning consumer demand and increased price sensitivity, the company has struggled to maintain sales momentum. Criticism over its use of artificial food dyes—particularly in products served in schools—has added to its reputational challenges. In response, WK Kellogg recently announced reformulation efforts following discussions with U.S. Health Secretary Robert F. Kennedy Jr.
Despite these difficulties, analysts say WK Kellogg’s strong brand portfolio makes it an attractive acquisition target. “For Ferrero, this deal presents an opportunity to diversify beyond confectionery and deepen its presence in the U.S. market,” said Arun Sundaram, analyst at CFRA Research.
Industry observers note that the proposed transaction would offer WK Kellogg a path forward under a well-capitalized parent known for revitalizing mature brands. Ferrero’s successful integration of acquisitions like Ferrara Candy Company and Fannie May underscores its strategic capabilities in brand development.
Deal Structure and Valuation
According to Robert Moskow, an analyst at TD Cowen, the $3 billion valuation implies a price of approximately $27.61 per share for WK Kellogg equity holders, after accounting for $570 million in net debt. WK Kellogg currently holds a market capitalization of around $1.5 billion.
The deal is expected to include key cereal trademarks and production facilities, although neither Ferrero nor WK Kellogg has issued an official comment at the time of writing. The transaction remains subject to customary regulatory approval and closing conditions.
If completed, the acquisition would mark another step in the ongoing transformation of the U.S. consumer packaged goods sector. Last year, Mars Inc. struck a $36 billion deal to acquire Kellanova—the snack and frozen food business formed from the other half of the former Kellogg Company.
As consolidation continues and global players seek growth in mature markets, Ferrero’s latest move reaffirms its ambition to become a dominant force across multiple food categories in North America.
