WK Kellogg Co (NYSE: KLG) soared about 30% on Thursday morning after Italian confectionary giant Ferrero said it will buy the cereal maker for $3.1 billion.
Ferrero’s deal values each KLG share at $23, representing about a 40% premium on its previous close. The acquisition marks its latest push into the US market – expanding its footprint beyond sweets and breakfast staples.
According to Kellogg’s press release, the announced transaction is expected to complete before the end of this year, provided that the required approvals (regulatory and shareholders) are secured by then.
Following today’s rally, Kellogg shares are trading at a year-to-date high.
What the Ferrero deal means for Kellogg stock
WK Kellogg, known for iconic cereals like Frosted Flakes, Froot Loops, and Special K, was spun off from Kellogg Company in 2023 as part of a strategic pivot toward snacks.
Ferrero’s $23-per-share deal to acquire KLG reflects a significant premium and, therefore, boosts investor confidence in what the future holds for the food company.
The announced agreement could prove a lifeline for Kellogg, which has struggled amidst shifting consumer preferences away from sugary cereals and toward healthier, protein-rich breakfast options.
Moreover, the Italian firm’s buyout proposal underscores value of legacy brands in a consolidating food industry – where nostalgia and brand recognition still carry weight.
Once the deal closes, Kellogg stock will be delisted from the NYSE and the company will become a subsidiary of Ferrero – a transition that could offer more operational flexibility and long-term strategic investment.
What the Kellogg deal means for Ferrero
For Ferrero, the acquisition is more than just a portfolio expansion – it’s a strategic leap into the US breakfast market.
Known for Nutella, Kinder, and Ferrero Rocher, the company has steadily grown its North American presence through acquisitions of brands like Keebler, Famous Amos, and Blue Bunny.
By adding WK Kellogg’s cereal lineup, Ferrero gains access to a category with deep cultural roots and broad distribution across the US, Canada, and the Caribbean.
Giovanni Ferrero, Executive Chairman of the Ferrero Group, called the deal “a key milestone,” adding that it “represents the coming together of two companies, each with a proud legacy and generations of loyal consumers”.
The acquisition also positions Ferrero to diversify its offerings across more consumption occasions – from breakfast to dessert – while leveraging its global supply chain and marketing expertise to revitalise KLG’s cereal brands.
Bottom line
Ferrero’s $3.1 billion bet on WK Kellogg signals renewed confidence in legacy food brands and a strategic pivot toward broader consumer engagement.
For Kellogg stock investors, it’s a sweet surprise. For Ferrero, it’s breakfast served with ambition.
The post Kellogg shares soar 30% on Ferrero deal: what it means for investors appeared first on Invezz