Snack leader expands portfolio, eyeing global cereal and snack markets

Italian confectionery giant Ferrero has agreed to acquire U.S. cereal and snack powerhouse Kellogg Company for $3.1 billion in cash, marking one of the most significant consolidations in the food industry this year. The deal, announced on July 20, brings together iconic brands such as Nutella and Ferrero Rocher with Kellogg staples like Frosted Flakes and Pringles under a single corporate umbrella.

Under the terms of the agreement, Ferrero will purchase Kellogg’s North American cereal and snacks business, including its Pop-Tarts and Eggo lines, while Kellogg shareholders will receive $75 per share. The transaction is expected to close by the end of 2025, pending regulatory approvals and customary closing conditions.

Ferrero’s CEO, Giovanni Ferrero, described the acquisition as a strategic move to diversify the company’s offerings and strengthen its presence in North America. “This combination will create a leading global snacks and breakfast company with an unrivaled portfolio and unparalleled distribution reach,” he stated in a joint press release with Kellogg.

For Kellogg, the divestiture will allow the company to focus on its emerging markets and plant-based businesses. CEO Steve Cahillane noted: “Partnering with Ferrero enables Kellogg to unlock value for shareholders while concentrating on innovation in categories where we see the highest growth potential.”

Analysts believe the deal delivers significant synergies. By integrating Kellogg’s manufacturing facilities and distribution networks with Ferrero’s R&D and marketing prowess, the combined entity could realize annual cost savings of approximately $250 million by 2027, according to consultancy forecasts.

Industry observers also point to changing consumer preferences as a driving factor behind the merger. Growing demand for convenient, indulgent snacks and on-the-go breakfast options has reshaped the competitive landscape, prompting major players to pursue scale and brand diversification.

Regulatory scrutiny is expected, particularly from U.S. antitrust authorities concerned about competition in the cereal aisle and snack segment. However, both companies expressed confidence that the deal will satisfy regulatory requirements, emphasizing their commitment to maintaining robust competition.

The transaction caps a busy period of M&A in the food sector, following recent deals such as Nestlé’s acquisition of The Bountiful Company and Unilever’s purchase of Olly Nutrition. “Consolidation is accelerating as companies seek growth amid market saturation,” noted food industry veteran Linda Zhao.

Shareholders have reacted positively: Kellogg’s stock rose 12% on the day of the announcement, while Ferrero’s share dip in Europe was modest. Credit rating agencies have affirmed both companies’ investment-grade ratings, citing manageable leverage and strong free cash flow profiles.

As integration planning begins, employees and customers alike will watch closely how Ferrero balances brand autonomy with operational efficiencies. If successful, the $3.1 billion deal could set a new precedent for scale-driven growth in the global snack marketplace.