WK Kellogg agrees to $3.1 billion dollars deal to be acquired by Italian company Ferrero

WK Kellogg on Thursday agreed to be bought by the owner of Ferrero Rocher in a transaction worth roughly $3.1 billion, as the cereal producer has been battling with decreasing customer demand owing to consistently high inflation.

Transactions in the snack sector have gathered momentum as food firms struggle with decreased sales in the wake of price hikes due to rising input costs and a shift in consumer preference toward healthier options.

Ferrero paid 31% more than the stock’s most recent close, offering WK Kellogg stockholders $23 per share. In early trading on Thursday, the cereal manufacturer’s shares were up 30.4% at $22.84.

Bringing together classic brands including Nutella, Kinder, Tic Tac, Frosted Flakes, Froot Loops, and Special K, the deal marks Ferrero’s biggest acquisition in recent years.

Reuters and other media sites said Wednesday night that a deal to acquire WK Kellogg was imminent for the company that makes Nutella.