Market Overview

Kellogg Sells Keebler, Other Brands To Ferrero In $1.3B Deal

Share:
Kellogg Sells Keebler, Other Brands To Ferrero In $1.3B Deal

Kellogg Company (NYSE: K) announced Monday that it's selling its Keebler, Famous Amos and fruit snack businesses to Nutella owner Ferrero Group.

What Happened 

The value of the deal is $1.3 billion, and it is expected to close by the end of July, Kellogg said in a press release. 

CNBC reported Sunday that the Italian chocolatier beat Hostess Brands Inc (NASDAQ: TWNK) for the Kellogg assets, citing people familiar with the situation. 

Why It’s Important

Kellogg acquired Keebler in 2001 for $4.4 billion, CNBC said.

The sell-off by Kellogg is an effort to bring sharper focus to its core businesses like Pringles, Cheez-Its and Rice Krispies treats, according to the cable news channel.

"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," Steve Cahillane, Kellogg chairman and CEO, said in a statement. 

"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." 

What’s Next

Shares of Kellogg, which has a market cap of $19.47 billion, are down nearly 11 percent over the past year. The stock was trading down 1.29 percent at $56.64 at the time of publication Monday. 

Related Links: 

Q3 13F Roundup: How Buffett, Einhorn, Ackman And Others Adjusted Their Portfolio 

Kellogg Raids Cookie Jar With New Organizational Structure 

Photo by Evan-Amos/Wikimedia

Posted-In: CNBC food food stocksNews Asset Sales M&A Media Best of Benzinga

 

Related Articles (K + TWNK)

View Comments and Join the Discussion!

KeyBanc Lifts Roku Price Target Amid Ongoing Momentum

Apple's Stock Under Pressure Following Report Of Product Price Cuts In China