NEW YORK: The Italian candy maker behind Ferrero Rocher and Nutella is nearing a deal to buy cereal maker WK Kellogg, an acquisition that would combine two of the world’s best known consumer food makers.
Shares of WK Kellogg – the company behind Froot Loops and Frosted Flakes –surged about 55% in extended trading, after the Wall Street Journal reported that Ferrero could finalise the roughly US$3bil deal as soon as this week.
WK Kellogg currently has a market value of about US$1.5bil.
The companies did not immediately respond to Reuters’ requests for comment.
Purchasing WK Kellogg would be privately held Ferrero’s latest effort to expand its footprint in the United States.
Ferrero, a 79-year-old company that owns brands such as Tic Tac and Kinder in North America, has started buying American brands only recently under the aegis of the company’s chairman Giovanni Ferrero.
In the past few years, the company has acquired Wells Enterprises, the maker of Blue Bunny and other ice-cream brands, and struck a US$2.8bil deal to buy Nestle’s US chocolate business.
Ferrero now has 15 plants and warehouses across the United States, Canada and the Caribbean, employing more than 5,100 people.
“For Ferrero, this deal presents an opportunity to diversify beyond confectionery and deepen its presence in the US market,” said Arun Sundaram, analyst with CFRA Research. — Reuters
