WK Kellogg Shares Surge 50% After $3B Ferrero Deal Report
Published On: July 10, 2025.
Shares of WK Kellogg Co. (NYSE: KLG) experienced a significant surge, climbing approximately 50% in after-hours trading on Wednesday, following reports that Italy’s Ferrero International SA is nearing a $3 billion acquisition of the cereal company. The deal, which could be finalized as early as this week, would mark a substantial expansion for Ferrero into the U.S. breakfast food market.
WK Kellogg, formed in October 2023 after the split of Kellogg Company, owns iconic cereal brands such as Froot Loops, Frosted Flakes, and Rice Krispies. Despite its strong brand portfolio, the company has faced challenges, including declining sales and increased scrutiny over the use of artificial food dyes in its products. The proposed acquisition by Ferrero would allow the cereal maker to leverage its established presence in the U.S. market to drive growth and innovation.
Ferrero, best known for its Nutella hazelnut spread and Ferrero Rocher chocolates, has been actively expanding its footprint in the North American market. In recent years, the company has acquired several U.S.-based businesses, including Wells Enterprises, the maker of Blue Bunny ice cream, and Nestlé's U.S. chocolate business in a $2.8 billion deal. The proposed acquisition of WK Kellogg would further diversify Ferrero's product offerings and strengthen its position in the U.S. food industry.
The proposed $3 billion deal would value WK Kellogg at approximately $27.61 per share, a significant premium over its current market value of around $1.5 billion. The acquisition would also include the company's net debt of $570 million, bringing the total enterprise value to approximately $3 billion.
Analysts view the potential deal as a strategic move for Ferrero to tap into the growing demand for breakfast cereals and capitalize on changing consumer preferences. Arun Sundaram, an analyst with CFRA Research, noted that the acquisition would allow Ferrero to diversify beyond confectionery and deepen its presence in the U.S. market.
The market's positive reaction underscores investor confidence in the potential benefits of the acquisition. If finalized, the merger would combine two of the world's best-known consumer food makers, creating a formidable player in the global food industry.
As the deal progresses, stakeholders will be closely monitoring regulatory reviews and potential antitrust considerations. However, if approved, the acquisition could reshape the competitive landscape of the U.S. food market and set the stage for further consolidation in the industry.