- Kellogg has agreed to sell its Keebler and Famous Amos brands, as well as its fruit-snacks business, to Ferrero for $US1.3 billion.
- The deal is expected to close by the end of July, the companies said in a statement on Monday.
- Watch Kellogg trade live.
Kellogg agreed on Monday to sell a collection of businesses to the Italian chocolate maker Ferrero for $US1.3 billion, according to a statement from Kellogg.
Among the businesses are Keebler and Famous Amos, as well as several smaller ones including fruit snacks and cookies manufactured for Girl Scouts of the USA. The businesses had total sales of nearly $US900 million and an operating profit of approximately $US75 million for 2018, implying a multiple of over 17 times pretax earnings.
“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’s chairman and CEO, said in the 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.”
Ferrero has aggressively expanded into the US over the past few years. While the privately held company first bought Tic Tac mints in 1969, it has stepped up its expansion plans more recently with purchases of Ferrara Candy Company for $US1 billion and Nestle’s candy business – which includes the Crunch and Butterfinger chocolate bars – for $US2.8 billion.
Kellogg, on the other hand, has been paring back its businesses as consumer tastes shift away from sugar-based cereals. The company has also moved toward private-label products. The company’s 2018 sales of $US13.5 billion were down nearly 10% from a peak in 2013.
Kellog was up 1% in premarket trading Monday and is up 2% this year.
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