Published in Food/Agribusiness

Kellogg to sell Keebler, other snack brands to Ferrero Group for $1.3 billion

BY MiBiz Staff Monday, April 01, 2019 09:22am

BATTLE CREEK — Kellogg Co. is selling off Keebler, Famous Amos and other snack brands in a move to reshape it product portfolio.

The Battle Creek-based Kellogg (NYSE: K) said today that it reached a definitive agreement to sell certain portions of its snack business to Italy-based confectioner Ferrero Group in a transaction valued at $1.3 billion, according to a statement.

The deal includes Kellogg’s cookies, fruit and fruit flavored snacks, pie crusts and ice cream cones businesses sold under Keebler, Mother’s, Famous Amos, Murray’s and Murray’s Sugar Free brands. The Kellogg cookie portfolio also includes products made for the Girl Scouts of the U.S.A.

Related assets and facilities in Georgia, Kentucky, Washington and Illinois are included in the divestiture.

Ferrero Group is a global company with sales of more than $12 billion. Its product portfolio includes Ferrero Rocher chocolates, Tic Tac mints, Nutella and other candies.

Kellogg will retain its crackers, salty snacks, wholesome snacks and toaster pastries brands, according to a statement.

The business to be divested recorded $75 million in operating profit on revenues of $900 million in 2018. Kellogg expects the deal to be less than 5 percent dilutive to the company’s adjusted earnings per share in the current 2019 fiscal year, assuming the proceeds from the transaction are used to reduce outstanding debt.

The deal, which is subject to closing conditions and regulatory approvals, is expected to close by the end of July, according to the company.  

“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,” Kellogg Chairman and CEO Steve Cahillane said in a statement, calling Ferrero “a first-class organization.”  

Kellogg was advised on the deal by Evercore and Goldman Sachs. New York City-based Wachtell, Lipton, Rosen & Katz LLP is representing the company.

Read 3028 times Last modified on Monday, 01 April 2019 09:39