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Ferrero Eyes WK Kellogg in $3 Billion Takeover as Breakfast Market Consolidates

Shares of WK Kellogg surged over 50% on Wednesday after a Wall Street Journal report revealed that Ferrero, the Italian confectionery powerhouse behind Nutella and Ferrero Rocher, is in advanced talks to acquire the cereal maker for approximately $3 billion.

Sources familiar with the matter indicated that the deal could be finalized as early as this week, marking one of the most significant moves in the U.S. packaged food space this year.

A Legacy Brand in Transition

WK Kellogg, the company behind childhood breakfast staples like Froot Loops, Frosted Flakes, Corn Pops, and Apple Jacks, was spun off from Kellogg Company in 2023. The parent company was renamed Kellanova, which retained the snack-focused brands such as Pringles, Cheez-It, and RXBar.

While Kellanova is still awaiting closure on its $36 billion acquisition by Mars (maker of M&Ms and Skittles), WK Kellogg has been operating as a standalone cereal-focused entity, valued at around $1.5 billion before Wednesday’s rally.

Ferrero's Deepening U.S. Expansion Strategy

If completed, the acquisition would reinforce Ferrero’s aggressive expansion into the U.S. food market. Already the third-largest candy company in the U.S., Ferrero has been steadily building a broader presence through acquisitions, including previous purchases of brands like Nestlé’s U.S. candy business, Butterfinger, and Crunch.

In May 2025, Ferrero announced a slate of new product innovations tailored for U.S. consumers, including peanut-based Nutella variants and Dr Pepper-flavored Tic Tacs, highlighting its ambition to adapt to American tastes and diversify beyond confectionery.

A Consolidation Play Amid Changing Consumer Preferences

The potential deal comes amid a larger trend of consolidation in the packaged food sector, especially among legacy brands facing challenges from changing consumer habits.

Over the past several years, sugary cereals have lost ground to perceived healthier breakfast alternatives like Greek yogurt, protein bars, and oat-based products. Inflationary pressures have also driven more consumers toward private-label cereal brands, putting further stress on traditional category leaders like WK Kellogg.

An acquisition by Ferrero could offer WK Kellogg the strategic capital, innovation pipeline, and operational efficiencies needed to reenergize its product offerings and distribution.

Market Reaction and Outlook

Following the news, WK Kellogg’s stock closed up more than 50%, reflecting investor optimism about the potential for stronger leadership and global synergy under Ferrero’s ownership.

Even with the rally, WK Kellogg’s stock had been down 2% year-to-date before the news broke, with analysts citing slow revenue growth and brand fatigue as headwinds.

Industry observers believe that Ferrero’s entry into breakfast foods could spark a new wave of M&A activity as major food conglomerates look to reposition their portfolios for long-term growth amid evolving consumer behaviors.

A Sweet Deal or Strategic Risk?

Should Ferrero successfully close the WK Kellogg acquisition, it will mark a bold push into one of the most competitive and traditionally American-dominated food categories. As global food giants look for scalable growth and deeper U.S. penetration, this deal could be a harbinger of more strategic tie-ups in the near future.