MW Nutella with your Corn Flakes? This cereal giant's stock rallies on word of a $3 billion deal.

By Claudia Assis

Deal would reportedly value cereal maker WK Kellogg at double its market value

WK Kellogg Co., the maker of Corn Flakes, Froot Loops and other iconic cereals, grabbed investors' attention late Wednesday after a report that the privately owned Italian maker of Ferrero Rocher and Nutella has set its sights on the company, which has struggled to find its footing amid changes in food preferences.

Citing people familiar with the negotiations, the Wall Street Journal reported late Wednesday that Ferrero is closing in on a deal to buy WK Kellogg (KLG) for $3 billion, with details possibly ironed out as soon as this week. WK Kellogg has a market cap of $1.5 billion, and around $570 million in debt.

Shares of WK Kellogg skyrocketed more than 40% in the extended session Wednesday, after ending the regular trading day up 3.5%. WK Kellogg was spun off from Kellanova (K), formerly the Kellogg Co., and began trading as a standalone company in 2023. Kellanova is being acquired by privately held Mars.

In its short existence, however, the company has seen its cereal brands languish on U.S. grocery shelves as Americans seek other breakfast foods. In a recent report, analysts at Morningstar said they "fail to see an enduring competitive edge in WK Kellogg's standalone business."

Kellogg, whose main rival is General Mills Inc. (GIS), the maker of Cheerios as well as other cereal brands, snacks and other foods, has a "leading" market share in the North American cereal aisle, but that's "diluted as its entire portfolio sits in a shrinking category," Morningstar said. And without ties with a faster-growing snacks arm, which is now with Kellanova, WK Kellogg "is left with a subpar scale, generating less than $3 billion in sales annually."

WK Kellogg in May cut its full-year sales outlook, saying that it was "advancing with urgency and purpose to meet the evolving needs of our consumers within this challenging environment."

Shares of WK Kellogg are down around 3% so far this year, contrasting with gains of more than 6% for the S&P 500 index SPX.

-Claudia Assis

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July 09, 2025 17:06 ET (21:06 GMT)

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