WK Kellogg Buyout Buzz: Ferrero Nearing Takeover, KLG Stock Explodes Above $26
Rumors of a major acquisition deal sent WK Kellogg shares soaring after hours on Wednesday, marking a dramatic turn for the cereal brand.
Quick overview
- WK Kellogg shares surged 50% after rumors of a $3 billion acquisition deal by Ferrero, including $500 million in debt.
- The acquisition would enhance Ferrero's presence in North America, following its recent purchases of Nestlé's US chocolate business and Wells Enterprises.
- WK Kellogg, created as a spin-off in 2023, owns iconic cereal brands but has struggled with growth, prompting the buyout speculation.
- If finalized, the deal could significantly impact the US packaged foods market and provide WK Kellogg with the resources needed to revitalize its brand portfolio.
Rumors of a major acquisition deal sent WK Kellogg shares soaring after hours on Wednesday, marking a dramatic turn for the cereal brand.
Ferrero Reportedly Nears $3 Billion Deal for WK Kellogg
Italian confectionery giant Ferrero is reportedly close to acquiring WK Kellogg Co. (NYSE: KLG) in a deal valued at around $3 billion, including approximately $500 million in debt. Sources suggest the agreement could be finalized within days, fueling industry speculation about further consolidation in the US packaged food market.
Expanding Footprint in the US Market
If confirmed, the acquisition would be Ferrero’s latest strategic push into North America. The family-owned company, famous for its Nutella spread and Ferrero Rocher chocolates, has been steadily expanding its US presence. In recent years, it acquired Nestlé’s US chocolate business and Wells Enterprises, the maker of Blue Bunny ice cream, demonstrating a clear plan to diversify and deepen its American portfolio.
WK Kellogg: A Spin-Off with Iconic Brands
WK Kellogg Co. was created in 2023 as a spin-off of the Kellogg Company’s legacy cereal business. It owns household staples like Rice Krispies, Frosted Flakes, and Froot Loops. Meanwhile, Kellogg’s more lucrative global snacks division was sold to Mars in a $36 billion deal, underscoring the growing divide between high-margin snack brands and mature, lower-growth cereal lines.
Despite its iconic brands, WK Kellogg has struggled to deliver consistent growth since the spin-off. The company cut its full-year guidance last quarter after disappointing consumption trends, missing analyst estimates on both revenue and earnings.
KLG Stock Skyrockets 50% on Buyout Buzz
The buyout rumors lit a fire under WK Kellogg’s stock, which surged 50% in after-hours trading. Shares jumped from $17.50 at the close to $26.18, well above the previous 2024 high of $23.94 set in April. This surge comes after more than a year of choppy performance, as investors bet that Ferrero’s resources and distribution expertise will help revive the storied cereal business.
Outlook and Industry Impact
If completed, the deal would mark one of the most significant moves in the US packaged foods space this year. For Ferrero, it represents an ambitious attempt to reshape the breakfast aisle and build out a more diversified North American footprint. Analysts note that the acquisition could offer much-needed scale and marketing muscle to WK Kellogg’s stable of classic brands, but integration challenges and broader category headwinds remain.
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