WK Kellogg Stock Jumps After Ferrero Strikes $3.1B Deal To Acquire The Cereal Maker

The maker of Ferrero Rocher is buying WK Kellogg for $23 per share in cash with the deal uniting everything from cereals such as Froot Loops to chocolates such as Kinder under one roof.

WK Kellogg (KLG) said on Thursday that the Italian company Ferrero Group will buy the breakfast cereal maker in a $3.1 billion deal, expanding the confectionery firm’s U.S. footprint.

The maker of Ferrero Rocher has agreed to acquire WK Kellogg for $23 per share in cash, with a 31.4% premium to the Froot Loops maker’s last close of $17.50.

WK Kellogg shares jumped 30% in premarket trading. Retail sentiment jumped to ‘extremely bullish’ from ‘bullish’ a day ago, according to Stocktwits data.

The deal brings together WK Kellogg’s cereals, such as Frosted Flakes, Froot Loops, Special K, and Rice Krispies, and Ferrero’s brands, such as Nutella, Kinder, Tic Tac, and Ferrero Rocher under one roof.

This acquisition includes the manufacturing, marketing and distribution of WK Kellogg Co's breakfast cereals across the U.S., Canada and the Caribbean and is part of Ferrero's plan for strategic growth.

Ferrero, in recent years, has acquired a number of legacy brands, including Keebler, Butterfinger, and Baby Ruth.

The Wall Street Journal first broke the news on Wednesday regarding the potential deal between Ferrero Group and WK Kellogg.

WK Kellogg was spun off from Kellanova (K) in 2023 and has been struggling to drive growth at a time when consumer demand in the packaged food sector has declined due to the price hikes undertaken by companies, which have pushed cost-sensitive customers to seek cheaper alternatives, such as private label brands.

Kellanova is being bought out by chocolate maker Mars in a nearly $36 billion deal, which has now come under the European Union’s antitrust investigation. The U.S. Federal Trade Commission (FTC) announced in June, however, that it would be terminating its review early, signaling that the merger does not violate antitrust laws.

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