Nutella Maker Ferrero Group Buys Kellog Co for $3.1 Billion

Nutella maker Ferrero Group is buying cereal giant WK Kellogg Co in a $3.1 billion deal.

Shares of WK Kellogg (KLG) jumped more than 30% in early trading. Ferrero said that it “plans to invest in and grow” the Kellogg business, which includes 14,000 employees and 22 plants.

The sale comes at a volatile time for the snack industry, as consumer preferences are changing:

WK Kellogg’s CEO Gary Pilnick faced backlash last year after he suggested that customers eat cereal for dinner given skyrocketing food prices.

In a press release, Pilnick said the Ferrero deal will bring Kellogg “greater resources and more flexibility to grow our iconic brands in this competitive and dynamic market,” and that the companies would “explore opportunities beyond cereal” as well.

WK Kellogg is Ferrero’s most substantial acquisition so far, with a market cap of roughly $1.5 billion and a portfolio of household-name cereals including Raisin Bran, Corn Flakes and Apple Jacks. Ferrero also bought Nestlé’s US business and Blue Bunny ice cream in recent years.

Ferrero’s purchase is “another smart move” for its North America ambitions, said Brad Haller, senior partner at West Monroe, a firm that advises businesses on mergers.