WK Kellogg Stock Soars 50% Higher On Takeover Reports
The stock of WK Kellogg (KLG) is up a little more than 50% on reports that chocolate maker Ferrero is offering $3 billion U.S. to acquire the cereal company.
Ferrero, a privately held Italian company known for its Ferrero Rocher hazelnut chocolates, could finalize a purchase of the breakfast foods company within days, according to reports.
Battle Creek, Michigan-based WK Kellogg, which makes cereals such as Corn Flakes and Froot Loops, was spun off as a standalone company in 2023.
A separate publicly traded concern, Kellanova (K), now houses snack brands such as Pringles chips and Cheez-It crackers.
M&M owner Mars, also privately owned, agreed to buy Kellanova for $36 billion U.S. last year in a deal that has not yet been finalized.
A Ferrero acquisition of WK Kellogg would be the latest example of consolidation in the packaged food industry.
Many consumers have abandoned sugary cereals in favor of breakfast options that are considered healthier, while shoppers have moved down to private label brands that are cheaper.
The purchase of WK Kellogg would expand European-based Ferrero’s operations and reach in the U.S. market.
In May of this year, Ferrero announced new products aimed at appealing to American consumers, including peanut flavoured Nutella and Dr Pepper flavoured Tic Tac candies.
Prior to today (July 10), WK Kellogg’s stock had fallen 2% this year to trade at $17.50 U.S. per share. The company has a $1.51 billion U.S. market capitalization.
