Kellogg announced plans Monday to sell its Keebler, Famous Amos and fruit snacks businesses to Nutella-owner Ferrero for $1.3 billion.
Ferrero beat out Hostess Brands for the cookie business, people familiar with the deal previously told CNBC. The owner of Twinkies and Ho Hos had been looking to acquire Keebler through a “Reverse Morris Trust, ” an unusual deal structure that allows for a tax-efficient combination of two similarly sized companies.
The Kellogg-Ferrero deal, expected to close by the end of July, was first reported by CNBC.
The acquisition is the latest in a string of deals for Ferrero. The company, founded in Italy in 1946 as a family business, entered the U.S. market in 1969 with its Tic Tac mints. In the past two years, it has built up that foothold, buying Ferrara Candy Co. for $1 billion and Nestle’s U.S. candy business for $2.8 billion. Its array of brands now includes Butterfinger, SweeTarts and Crunch.
Its U.S. strategy has been to buy brands that, like Nestle’s candy business and Kellogg’s cookie business, have been neglected within broader food companies’ portfolios. It plans to pour its resources into reinvesting and modernizing those brands. Already, it has rolled out a “better Butterfinger” with larger peanuts, more cocoa and milk and no hydrogenated oils.Read More
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