Kellogg shares soar as Nutella maker Ferrero takes cereal giant private in huge deal
The Ferrero Group said it will pay 23 dollars (£16.95) for each Kellogg share
Ferrero, known for brands like Nutella, Butterfinger and Kinder, is taking cereal company WK Kellogg private in a deal valued at approximately $3.1 billion.
The Italian confectioner is buying the century-old US cereal company WK Kellogg in a deal valued at approximately 3.1 billion dollars (£2.3 billion).
The Ferrero Group said it will pay 23 dollars (£16.95) for each Kellogg share.
The transaction includes the manufacturing, marketing and distribution of WK Kellogg Company's portfolio of breakfast cereals across the United States, Canada and the Caribbean.
WK Kellogg's shares were up 30% in pre-market trading on Thursday.
Kellogg, which was founded in Battle Creek, Michigan, in 1906, makes Fruit Loops, Special K, Frosted Flakes and Rice Krispies.
The current company was formed in 2023, when Kellogg's snack brands such as Cheez-Its and Pringles were spun into a separate company called Kellanova.
M&M's maker Mars announced last year that it planned to buy Kellanova in a deal worth nearly 30 billion dollars (£22 billion).
Ferrero Group, which was founded in Italy in 1946, has been trying to expand its US footprint.
In 2018 it bought Nestle's US sweets brands, including Butterfinger, Nerds and SweeTarts.
And in 2022 it bought Wells Enterprises, the maker of ice cream brands such as Blue Bunny and Halo Top.
The deal, which still needs approval from Kellogg shareholders, is expected to close in the second half of the year.
Once the transaction is complete, Kellogg's stock will no longer trade on the New York Stock Exchange and the company will become a Ferrero subsidiary.