Kellogg’s Sells Several Businesses to Ferrero for $1.3B

April 1, 2019

3 Min Read
Kellogg’s Sells Several Businesses to Ferrero for $1.3B
Ferrero will acquire the Keebler cookies brand and several other businesses from Kellogg's in a $1.3 billion deal. Image courtesy of Flickr user Willis Lam

Global confectionery firm Ferrero Group entered into a definitive agreement to purchase the Kellogg Company’s cookie, fruit and fruit-flavored snack, ice cream cone and pie crust businesses, the companies announced in separate press releases Monday.

Under the terms of the $1.3 billion deal, the Italian-owned firm will take on the Famous Amos and Keebler brands of cookies and a supplier of cookies to the Girl Scouts, Little Brownie Bakers. Kellogg’s fruit snacks business includes the Stretch Island and Fruity Snacks brands. Ferrero will also acquire Keebler’s brand ice cream cones and pie crust products. 

Ferrero said the move allows the company to pursue new product categories and bolsters its foothold in North America. When the transaction reaches a conclusion, they will take ownership of six production facilities in Georgia, Kentucky, Washington, and Illinois. 

“We are acquiring a portfolio of well-established brands that consumers love, with very strong market positions across their respective categories, allowing us to significantly diversify our portfolio and capitalize on exciting new growth opportunities in the world’s largest cookies market,” said Lapo Civiletti, chief executive officer of the Ferrero Group, in a statement. 

Last year, the businesses generated net sales of $900 million and an operating profit of $75 million. With the sale, the Battle Creek-based cereal and food products manufacturer intends to foster growth in other parts of its portfolio. 

“This divestiture is yet another action we have taken to reshape and refocus our portfolio, which will lead to reduced complexity, more targeted investment, and better growth,” Steve Cahillane, the chairman and chief executive officer of Kellogg Company, said in a release. “Divesting these great brands wasn’t an easy decision, but we are pleased that they are transitioning to an outstanding company with a portfolio in which they will receive the focus and resources to grow.”

Kellogg’s will hold on to its North America snacking businesses, including toaster pastries, salty snacks, and wholesome snacks. 

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