BATTLE CREEK, Mich. — The Kellogg Co. has agreed to sell its cookie, fruit snacks, pie crust and ice cream cone brands to the Ferrero Group for $1.3 billion. The companies expect the deal to close by the end of July, subject to customary approvals and closing conditions.
The deal includes the Kellogg’s Keebler, Famous Amos, Mother’s, Murray, Murray Sugar Free, Little Brownie Bakers, Stretch Island and Fruity Snacks brands. These businesses garnered net sales of nearly $900 million in 2018, according to Kellogg. The transaction also includes Kellogg’s production facilities in Augusta, Ga.; Florence, Ky.; Louisville, Ky.; Allyn, Wash.; and Chicago. Kellogg will retain the rest of its North America snacking businesses, including its crackers, salty snacks, wholesome snacks and toaster pastry brands.
"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, chairman and CEO of Kellogg. "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."
This deal has been brewing for months. In November 2018, Kellogg revealed it was looking to sell its cookie and fruit snack business, since these sectors had struggled competing for resources and investments, Kellogg said.
“Kellogg Co.’s cookie, fruit snack, ice cream cone and pie crust businesses are an excellent strategic fit for Ferrero as we continue to increase our overall footprint and product offerings in the North American market,” said Giovanni Ferrero, executive chairman of Ferrero. “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 Nestle U.S. confectionery business. 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.”
Based in Alba, Italy, Ferrero is a global chocolate confectioner with worldwide sales of more than $12 billion. The company distributes to more than 170 countries. Those products include Tic Tac breath mints, Ferrero Rocher hazelnut chocolates, Nutella Hazelnut Spread, Kinder Joy and Fannie May chocolates. In January 2018, Ferrero acquired Nestle’s confectionery business for nearly $3 billion.
Battle Creek, Mich.-based Kellogg sells products in more than 180 countries. With nearly $13 billion in sales in 2017, it produces a variety of cereal, snack and convenience brands, including Special K, Pringles, Kellogg's Frosted Flakes, Pop-Tarts, Kellogg's Corn Flakes and more.