The Italian agrifood giant Ferrero (Kinder, Nutella, Crunch, etc.) will swallow up the American group WK Kellogg, specialist in breakfast cereals (Corn Flakes, Froot Loops, Rice Krispies, All-Bran, etc.) to accelerate its growth in North America.
The two groups announced Thursday morning, in a joint statement, this operation at $ 3.1 billion (including debt), which will be fully funded in cash.
Under their final agreement, Ferrero will pay 23 dollars per WK Kellogg share, which represents a premium of 31% compared to the closing course of the American group on Wednesday in Wall Street, and 40% on the average course of the last thirty days.
“This acquisition supports the expansion of the Ferrero portfolio and its growth in North America by adding the emblematic and highly complementary cereal brands of WK Kellogg,” notes the press release.
The transaction includes the production apparatus as well as marketing and distribution activities in the United States, Canada and the Caribbean, to allow Ferrero to “serve consumers for more opportunities throughout the day”.
The operation, unanimously approved by the boards of directors of the two companies, should be finalized in the second half. It requires the approval of WK Kellogg shareholders and regulatory authorities.
The American group will then become a full -fledged subsidiary of Ferrero, which has several confectionery brands, including the famous TIC TAC, as well as the chocolate spherical rocks appreciated by the ambassador’s evenings, if we believe the essential advertising spots since the late 1980s.
The city of Battle Creek (Michigan), seat of WK Kellogg, will become that of Ferrero North America.
Shareholders representing 21.7% of the capital of WK Kellogg have already committed to voting in favor of the acquisition.
American gluttony
The Wall Street Journal had deflowered the announcement late Wednesday afternoon by saying that Ferrero was “close to the finalization of a transaction of about three billion dollars” to buy WK Kellogg.
“Ferrero’s objective is to grow in the United States through acquisitions, after having already bought American confectionery activities (from the Swiss group) Nestlé” for $ 2.8 billion in 2018, “said the newspaper.
The action of WK Kellogg, whose origins date back almost 120 years, had flown by almost 50% in electronic exchanges after the New York Stock Exchange closed on Wednesday.
Ferrero, created in 1946 in the Piedmontese city of Alba (north of Italy) and entered the American market in 1969, currently employs more than 14,000 people in twenty-two factories and eleven offices in North America.
The group, whose turnover has reached 18.4 billion euros for its fiscal fiscal year shifted 2024 (+8.9% over one year), has more than 61,000 employees worldwide.
As a support for this transaction, WK Kellogg gave some preliminary elements on its second quarter results, which must be published on an unrecognized date at this stage. Its turnover is expected to be between $ 610 and $ 615 million, compared to 672 million a year earlier, and its operating profit that was profiled between 43 and 48 million (78 million a year earlier).
In June 2021, the breakfast giant Kellogg had revealed its intention to divide into three distinct and independent companies, but it had opted, in the end, for only two companies: WK Kellogg (cereals) and Kellanova (snack), which were born in October 2023.
This split took note of the slowdown in the cereal market, in decrease for ten years.
According to specialists, consumers turn more to snacks ready to take away. In addition, often accused of being too sweet and rich in additives, cereals have seen their image deteriorate.
Kellanova – Chips Pringles, Kellogg’s brand snacks (Egggo, Nutrigain, Rice Krispies Treats …), Cheez -Ite, Carr’s – is currently the subject of a buy -back attempt by his compatriot Mars for 36 billion dollars, announced in August 2024.
March intended to finalize the acquisition in the first half of 2025, but the European Commission, fearing price increases for consumers in a context of high food inflation, opened an investigation on June 25.
The Mars group (Twix, Snickers, M & M’s but also animal food Whiskas and Royal Canin) aims to diversify in savory snacks.
