Ferrero ready to buy Kellogg for $3 billion

Would you like some chocolate with your cereal? Italian chocolate maker Ferrero is reportedly about to acquire American breakfast specialist WK Kellogg, reports The Wall Street Journal . “This acquisition would bring together two fast-food manufacturers from opposite sides of the Atlantic” – and, more importantly, accelerate the Italian chocolatier’s diversification in the United States.

Founded nearly eighty years ago, Ferrero has since expanded worldwide to become the "third-largest chocolate confectionery manufacturer in the world," with some 35 brands sold in more than 170 countries, the American daily points out. Its flagship products include Ferrero Rocher, Nutella, and Kinder chocolates. The group generated revenue of €18.4 billion in the last fiscal year, an increase of nearly 9%.

Kellogg, for its part, remains the iconic brand behind corn flakes, invented in 1894 by Will Keith Kellogg and since then available in Froot Loops and Frosted Flakes, among others. In 2023, the breakfast giant split into two independent companies: WK Kellogg (cereals) and Kellanova (snacks) – the latter currently the subject of a takeover attempt by Mars. Valued at $1.5 billion on the New York Stock Exchange, WK Kellogg has more than $500 million in debt.

Ferrero is no stranger to the United States, notes The Wall Street Journal. The Italian company has already acquired Wells Enterprises, maker of Blue Bunny ice cream, among other brands. Previously, it reached a $2.8 billion deal to acquire Nestlé's chocolate business across the Atlantic.

Ferrero's acquisition of Kellogg, if confirmed, would come at a time when Americans' tastes for snacking are evolving, the newspaper also points out: "Rising prices on supermarket shelves, combined with the trend toward healthier options, are encouraging consumers to adopt new consumption habits and forcing companies in the sector to adapt."