The Ferrero Group will acquire Kellogg Co.’s cookie, fruit and fruit-flavored snack, ice cream cone and pie crust businesses for $1.3 billion.
Ferrero will pick up the Keebler, Famos Amos, Mother’s and Murray cookie brands, as well as Little Brownie Bakers, supplier of cookies to the Girl Scouts. The company will also acquire the fruit snacks business, including Stretch Island and Fruity Snacks, along with Keebler’s ice cream cones and pie crust products.
These businesses generated sales of approximately $900 million in 2018, earning $75 million in operating profit.
"This divestiture is yet another action we have taken to reshape and focus our portfolio, which will lead to reduced complexity, more targeted investment, and better growth," said Steve Cahillane, Kellogg's chairman and ceo. "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."
Ferrero will also take ownership of food manufacturing facilities in Allyn, Washington, Augusta, Georgia, Florence and Louisville, Kentucky, and two plants in Chicago, Illinois, along with a leased manufacturing facility in Baltimore, Maryland.
Since 2017, Ferrero has acquired several U.S. brands and businesses, and, with this transaction, Ferrero will enter into new strategic product categories and will further strengthen its position in the North American market.
Giovanni Ferrero, executive chairman of Ferrero Group, noted the company’s latest transaction will increase its overall footprint in the North American market.
“With this transaction, I look forward to bringing many iconic Kellogg brands into the Ferrero portfolio, to welcoming our new colleagues to the extended Ferrero community, and to continuing Ferrero’s strong track record of growing brands, as we have through our successful acquisitions of Fannie May, Ferrara Candy Co., and the former Nestlé U.S. confectionery business,” he said. “We have great respect for Kellogg, its legacy and values, and are proud that Kellogg has chosen Ferrero as a good home for these businesses.”
The transaction, subject to customary closing conditions and regulatory approvals, is expected to close later this year.