Nutella-maker Ferrero buys Kellogg

The Italian headquartered Ferrero, which produces delicious chocolates in golden wrappers, is set to buy America's biggest cereal company, WK Kellogg Co, for USD three-billion.

As per market reports, the chocolate company will pay a higher-than-usual acquisition premium, which is 40% above Kellogg’s average share price from the past month, to diversify its snack-heavy portfolio with Frosted Flakes, Kashi, and more than a dozen other boxed breakfast idols.

The transaction includes the manufacturing, marketing and distribution of Kellogg's portfolio of breakfast cereals across the United States, Canada and the Caribbean, marking Ferrero's push to grow its business in North America.

Kellogg's cereals have been fighting a steep curve as the general public has switched from cereals to protein bars and other breakfast items.

The takeover comes at a time when the food industry grapples with changing tastes and a flight towards healthier options. The transaction includes the manufacturing, marketing and distribution of Kellogg's portfolio of breakfast cereals across the United States, Canada and the Caribbean, marking Ferrero's push to grow its business in North America.

Acquisitions in the recent past have included Mondelez International purchasing US organic energy-bar maker Clif Bar & Co. as part of its plan to boost its snacks segment. Likewise, the Chicago-based maker of Oreos and Cadbury chocolates bought Clif Bar & Co.

The combination with Ferrero would give WK Kellogg "greater resources and more flexibility to grow our iconic brands in this competitive and dynamic market,” Gary Pilnic, CEO, WK Kellogg, said.