• Ferrero agrees to acquire WK Kellogg for approximately $3.1 billion.
• The deal comes as WK Kellogg faces declining demand for its cereals.
• Kellogg's shares saw a significant price increase following the acquisition announcement.

Ferrero, the Italian candy maker known for products like Nutella and Kinder, has announced its intention to acquire WK Kellogg for approximately $3.1 billion. This strategic move aims to enhance Ferrero's presence in the North American market by adding iconic breakfast brands including Froot Loops and Frosted Flakes to its portfolio, according to Reuters.

In an effort to diversify its offerings, Ferrero plans to pay $23 per share for WK Kellogg, marking a notable premium of 31% over the stock's last closing price. Following the announcement, WK Kellogg's shares surged by approximately 30.4%, reflecting positive market sentiment towards the acquisition, reports CBS News and Al Jazeera.

The acquisition is particularly relevant as Kellogg has been grappling with weakened consumer demand due to rising inflation and changing dietary preferences among U.S. shoppers, who increasingly favor healthier or store-brand options over traditional cereals. This challenge has made Kellogg's brands, historically popular among consumers, less competitive, as evidenced by their declining sales this recent quarter, according to India Times, India Times, and NPR.

WK Kellogg, which was formed in 2023 following a spin-off from the larger Kellogg Company, now finds itself in a position to leverage Ferrero's extensive resources for growth. The completion of this deal is subject to approval from Kellogg's shareholders and is expected to close in the second half of 2025. This acquisition reflects Ferrero's ongoing strategy to bolster its portfolio and navigate the current economic landscape, as highlighted by Executive Chairman Giovanni Ferrero, according to Reuters and SFGate.