Ferrero Buys Keebler

Ferrero buys Keebler.

Nutella maker Ferrero buys Keebler cookies from Kellogg for $1.3 billion.
    
Brand names moving to the Italian confectioner are Keebler®, Famous Amos®, Mother’s®, Murray® sugar-free, Little Brownie Bakers®, the supplier of cookies to the Girl Scouts, Stretch Island®, Fruity Snacks, Keebler’s® ice cream cones, and Keebler’s® pie crusts.
    
As part of the deal, Ferrero buys six Kellogg-owned US food manufacturing facilities in Allyn, Washington, Augusta, Georgia, Florence and Louisville, Kentucky, two plants in Chicago, Illinois, and a leased facility in Baltimore, Maryland.
Giovanni Ferrero of Ferrero Group said: ‘Kellogg Company’s cookie, fruit snack, ice cream cone, and pie crust businesses are a strategic fit for Ferrero as we continue to increase our footprint and product offerings in the North American market. With this transaction, I look forward to bringing iconic Kellogg brands into the Ferrero portfolio, to welcoming our new colleagues to the extended Ferrero community, and to continuing Ferrero’s strong track record of growing brands, as we have through our successful acquisitions of Fannie May, Ferrara Candy Company, and the former Nestlé US confectionary business. We have great respect for Kellogg, its legacy and values, and are proud that Kellogg has chosen Ferrero as a good home for these businesses.’
Lapo Civiletti of Ferrero Group said: ‘We are acquiring a portfolio of well-established brands that customers love, with strong market positions across their respective categories, allowing us to diversify our portfolio and capitalize on exciting new growth opportunities in the world’s largest cookies market.’
Todd Siwak of Ferrara Candy Company said: ‘The acquisition presents an exciting opportunity to advance our strategic growth objectives and we look forward to sharing our plans for the business with our customers, suppliers, and other partners in the coming weeks and months, and welcoming our new colleagues from Kellogg.’
Steve Cahillane of Kellogg said: ‘Divesting these great brands wasn’t an easy decision, but we are happy they are transitioning to an outstanding company with a portfolio in which they will get the focus and resources to grow. It will lead to reduced complexity, more targeted investment, and better growth. Divesting these brands takes a part of sales from our portfolio, but it’s sales that are declining replaced by sales that are growing. Shedding these units sharpens our focus on increasing sales in core categories and bolstering operating profit.’
Kellogg keeps its crackers, salty snacks, wholesome snacks, cereals, and toaster pastries brands.
Marco Eccheli of AlixPartners said: ‘Ferrero is investing in the biscuit business because this category accounts for a significant part of the consumption of sweets outside the meal, a sector next to Ferrero’s core business.’
Best known for Tic Tac® breath mints, FERRERO ROCHER® fine hazelnut chocolates, NUTELLA® The Original Hazelnut Spread®, KINDER JOY® chocolates, and FANNIE MAY® chocolates, Ferrero buys neglected brands from big food companies, then revives them through investment and innovation.
JP Morgan Securities and Davis Polk & Wardwell served as advisers to Ferrero.

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