Snap, crackle, sale: Nutella maker Ferrero plans to buy WK Kellogg for $3 billion
By DEE-ANN DURBIN and MICHELLE CHAPMAN
Italian confectioner Ferrero, known for brands like Nutella and Kinder, is buying the century-old U.S. cereal company WK Kellogg in an effort to expand its North American sales.
The Ferrero Group said Thursday it will pay $23 for each Kellogg share, or approximately $3.1 billion. The transaction includes WK Kellogg Co.'s six manufacturing plants, and the marketing and distribution of its breakfast cereals across the United States, Canada and the Caribbean.
WK Kellogg's shares were up 31% in early afternoon trading Thursday.
Kellogg was founded in Battle Creek, Michigan, in 1906 after its founder accidentally figured out how to make flaked cereal while he was experimenting with granola. Kellogg still makes Corn Flakes, as well as Froot Loops, Special K, Frosted Flakes, Rice Krispies and other cereals.
Kellogg now has four U.S. plants, which are located in Michigan, Pennsylvania, Tennessee and Nebraska. It also has a plant in Mexico and a plant in Canada. The company has around 3,000 employees.
The current company was formed in 2023, when Kellogg snack brands like Cheez-Its and Pringles were spun into a separate company called Kellanova. M&M's maker Mars Inc. announced last year that it planned to buy Kellanova in a deal worth nearly $30 billion.
Ferrero Group, which was founded in Italy in 1946, has been trying to expand its U.S. footprint. In 2018 it bought Nestle's U.S. candy brands, including Butterfinger, Nerds and SweeTarts. And in 2022 it bought Wells Enterprises, the maker of ice cream brands like Blue Bunny and Halo Top.
WK Kellogg's brands have been struggling with a long-term decline in U.S. cereal consumption as consumers turned to protein bars, shakes and other breakfast items. Cereal sales got a bump during the coronavirus pandemic as more families stayed home, but sales continued to decline after the pandemic eased.
At the start of July, U.S. cold cereal sales were down 6% compared to the same period in 2022, according to market research company Nielsen IQ. Kellogg's net sales fell 2% to $2.7 billion in 2024.
Brad Haller, a senior partner for mergers and acquisitions at West Monroe, said Kellogg's large distribution network and relationships with grocery chains in North America is appealing to Ferrero because it would help the European company negotiate pricing and positioning for its products.
The purchase also helps Ferraro expand beyond snacks and sweets and into a meal category, Haller said. But the company also may wind up cutting Kellogg brands or shutting down manufacturing plants.
'As Americans, these brands are iconic and beloved by us, but a European company buying these wouldn't have the same nostalgia,' Haller said.
Kellogg has had other issues. A nearly three-month strike by workers at all its U.S. cereal plants in late 2021 hurt sales. And last fall, dozens of people rallied outside the company's Battle Creek headquarters demanding that Kellogg remove artificial dyes from its cereals.
Earlier this year, Kellogg said it was reformulating cereals sold to schools to remove artificial dyes and will not include them in any new products starting in January.
Ferrero's acquisition, which still needs approval from Kellogg shareholders, is expected to close in the second half of the year. Once the transaction is complete, Kellogg's stock will no longer trade on the New York Stock Exchange and the company will become a Ferrero subsidiary.
© Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
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Beijing's tendency to view Starlink as tool of U.S. military power has sharpened its efforts to develop countermeasures -- which, if deployed, could increase the risk of collateral damage to other customers as SpaceX expands its global footprint. The same satellites that pass over China also potentially serve Europe, Ukraine, the United States and other geographies as they continue their path around the earth. Starlink says it operates in more than 140 countries, and recently made inroads in Vietnam, Niger, Somalia, the Democratic Republic of Congo and Pakistan. In June, Starlink also obtained a license to operate in India, overcoming national security concerns and powerful domestic telecom interests to crack open a tech-savvy market of nearly 1.5 billion people. On the company's own map of coverage, it has very few dead zones beyond those in North Korea, Iran and China. No other country or company is close to catching up with Starlink. Amazon billionaire Jeff Bezos has taken aim at rival Musk with Project Kuiper, which launched its first batch of internet satellites into orbit in April. So far Amazon has just 78 satellites in orbit, with 3,232 planned, according to McDowell, and London-based Eutelstat OneWeb has around 650 satellites in orbit, a fraction of the fleet it had initially planned. The European Union is spending billions to develop its own satellite array -- called the IRIS2 initiative -- but remains woefully behind. EU officials have had to lobby their own member states not to sign contracts with Starlink while it gets up and running. "We are allies with the United States of America, but we need to have our strategic autonomy," said Christophe Grudler, a French member of the European Parliament who led legislative work on IRIS2. "The risk is not having our destiny in our own hands." 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Qianfan is also targeting customers in Kazakhstan, Malaysia, Oman, Pakistan and Uzbekistan and has ambitions to expand across the African continent, according to a slide presented at a space industry conference last year and published by the China Space Monitor. Russia's invasion of Ukraine supercharges concerns Concerns about Starlink's supremacy were supercharged by Russia's 2022 full-scale invasion of Ukraine. The war was a turning point in strategic thinking about Starlink and similar systems. Ukraine used the Starlink network to facilitate battlefield communications and power fighter and reconnaissance drones, providing a decisive ground-game advantage. At the same time, access to the satellites was initially controlled by a single man, Musk, who can -- and did -- interrupt critical services, refusing, for example, to extend coverage to support a Ukrainian counterattack in Russia-occupied Crimea. U.S.-led sanctions against Moscow after the full-scale invasion also curtailed the availability of Western technology in Russia, underscoring the geopolitical risks inherent in relying on foreign actors for access to critical infrastructure. "Ukraine was a warning shot for the rest of us," said Nitin Pai, co-founder and director of the Takshashila Institution, a public policy research center based in Bangalore, India. "For the last 20 years, we were quite aware of the fact that giving important government contracts to Chinese companies is risky because Chinese companies operate as appendages of the Chinese Communist Party. Therefore, it's a risk because the Chinese Communist Party can use technology as a lever against you. Now it's no different with the Americans." Nearly all of the 64 papers about Starlink reviewed by AP in Chinese journals were published after the conflict started. Assessing Starlink's capabilities and vulnerabilities Starlink's omnipresence and potential military applications have unnerved Beijing and spurred the nation's scientists to action. In paper after paper, researchers painstakingly assessed the capabilities and vulnerabilities of a network that they clearly perceive as menacing and strove to understand what China might learn -- and emulate -- from Musk's company as Beijing works to develop a similar satellite system. Though Starlink does not operate in China, Musk's satellites nonetheless can sweep over Chinese territory. Researchers from China's National Defense University in 2023 simulated Starlink's coverage of key geographies, including Beijing, Taiwan, and the polar regions, and determined that Starlink can achieve round-the-clock coverage of Beijing. "The Starlink constellation coverage capacity of all regions in the world is improving steadily and in high speed," they concluded. In another paper -- this one published by the government-backed China Industrial Control Systems Cyber Emergency Response Team -- researchers mapped out vulnerabilities in Starlink's supply chain. "The company has more than 140 first-tier suppliers and a large number of second-tier and third-tier suppliers downstream," they wrote in a 2023 paper. "The supervision for cybersecurity is limited." Engineers from the People's Liberation Army, in another 2023 paper, suggested creating a fleet of satellites to tail Starlink satellites, collecting signals and potentially using corrosive materials to damage their batteries or ion thrusters to interfere with their solar panels. Other Chinese academics have encouraged Beijing to use global regulations and diplomacy to contain Musk, even as the nation's engineers have continued to elaborate active countermeasures: Deploy small optical telescopes already in commercial production to monitor Starlink arrays. Concoct deep fakes to create fictitious targets. Shoot powerful lasers to burn Musk's equipment. Some U.S. analysts say Beijing's fears may be overblown, but such assessments appear to have done little to cool domestic debate. One Chinese paper was titled, simply: "Watch out for that Starlink."
