This Candy Giant Just Bought The Kellogg Cereal Brand For $3.1 Billion

Since 1906, Kellogg brand cereals like Corn Flakes have been a beloved staple at breakfast tables around the country. Founded in Battle Creek, Michigan, the company has remained an American-based business for over a century — but that's about to change. It's been announced that Ferrero, the Italian-based chocolate manufacturer, is buying the cereal maker responsible for supplying folks with Frosted Flakes and the cereal  foundation of gooey Rice Krispie treats for a whopping $3.1 billion. The deal is to be finalized later this year after market regulators and shareholders agree to the buyout.

Kellogg's breakfast food brands have struggled in recent years as consumers have been opting for 'healthy' cereals containing less sugar. In 2023, the company split in a decision aimed at separating the struggling cereal side of the business from the more lucrative snacking market, sparking the creation of Kellanova. Not long after the separation, candy conglomerate Mars initiated the purchase of Kellanova for $36 billion in a deal which has yet to be finalized. Once Kellogg's deal with Ferrero goes through, it will mark the end of an era for a company many folks have adored since childhood.

While some folks may be sad to see an American breakfast staple be bought out by a company based overseas, investors aren't exactly upset. After the Kellogg buyout was announced, the value of WK Kellogg stocks rose by over 30%. Before the disclosure that Ferrero intended to buy the business, the cereal maker's stock value had dropped roughly 2% over the year, suggesting investors are optimistic that the chocolate company can turn things around for the struggling cereal brand.

Ferrero has been acquiring snacking giants in the United States for several years. The company procured Nestle brands like Sweet Tarts and Butterfinger in 2018. And in 2022, the producer of Rocher chocolates initiated the purchase of Wells Enterprises, the former manufacturer of Blue Bunny and other ice cream brands. These buyouts, along with the recent purchase of Kellogg, indicate Ferrero is betting big on the American consumer to boost the company's overall sales.