Iconic cereal and candy brands unite amid inflation pressure
Ferrero, the Italian confectionery giant behind Nutella and Ferrero Rocher, has struck a $3.1 billion deal to acquire WK Kellogg, the legacy cereal business spun off from Kellogg Company. The transaction, announced Thursday, brings together household brands like Frosted Flakes, Special K, Nutella, and Kinder under one global powerhouse.
The acquisition is expected to close in the second half of 2025 and marks Ferrero’s largest deal since it acquired Nestlé’s U.S. candy division in 2018. Shares of WK Kellogg surged 30.6% following the announcement, nearly aligning with Ferrero’s $23-per-share offer price.
Ferrero expands in U.S. as food giants reshape portfolios
The move gives Ferrero an immediate footprint in the U.S. breakfast cereal market, long dominated by Kellogg’s iconic brands. As food companies face waning consumer demand after sharp price hikes, many are turning to consolidation for growth. Ferrero’s acquisition diversifies its portfolio beyond cocoa-based products at a time when volatile commodity prices have stressed margins.
“WK Kellogg offers a valuable entry into American grocery aisles, giving Ferrero access to prime shelf space and well-established distribution networks,” said Michael Ashley Schulman, CIO at Running Point Capital Advisors. He noted the purchase also provides room for innovation and brand expansion in a high-value segment.
Broader M&A trend as inflation and policy reshape the sector
Ferrero’s move comes amid an uptick in M&A across the food and snacking industry. Kellanova, the other half of Kellogg’s 2023 split, is reportedly being acquired by Mars in a separate $36 billion transaction. Other major players like J.M. Smucker, Kraft Heinz, and PepsiCo have also faced mounting pressure from inflation, supply chain disruptions, and unpredictable trade policies under President Trump’s administration.
Health trends are adding to the challenge. The Make America Healthy Again Commission, led by Health Secretary Robert F. Kennedy Jr., has recently targeted synthetic additives in packaged food, pushing brands to reformulate products and comply with evolving standards.
Ferrero’s global ambitions and strategic focus
The WK Kellogg deal is part of Ferrero’s broader expansion strategy under executive chairman Giovanni Ferrero. The company reported €18.4 billion in turnover last fiscal year and has steadily increased investment in production capabilities and category diversification. By adding cereals to its portfolio, Ferrero is positioning itself to weather market shifts and better compete in global food retail.
The combined strength of legacy brands across sweets and breakfast staples may offer pricing power, innovation synergies, and resilience in the face of regulatory, economic, and commodity headwinds.
