The Ferrero Group picks up Keebler, Famous Amos & More

The Ferrero Group picks up Keebler, Famous Amos & More

By Alexia Elejalde-Ruiz — 04/01/2019

The Italian owner of Nutella and Fannie May chocolates is buying a portion of Kellogg’s North American snacks business including Keebler and Famous Amos cookies - a deal valued at $1.3 billion. 

The Ferrero Group and Kellogg Co. announced the definitive agreement Monday, under which Ferrero, whose Ferrara Candy Co. is based in the Chicago area, also will take over two of Kellogg’s production facilities on Chicago’s South Side.

The deal is expected to further strengthen both Ferrero’s and Chicago’s place in the U.S. snacking industry. In just the past two years, Ferrero bought Ferrara Candy, Nestle’s U.S. candy business and Fannie May Confections. Its global sales total more than $12 billion.

The purchased Kellogg’s business will be run out of Ferrara’s Chicago offices.

“Once the transaction closes, Ferrara will manage the acquired brand portfolio while working collaboratively with Ferrero to leverage the capabilities of the broader Ferrero ecosystem,” said Ferrara spokeswoman Sarah Kittel in an emailed statement.

She added that it’s Ferrara’s intention to invest in the businesses acquired from Kellogg and that the company looks forward to welcoming the Kellogg’s employees.

The two Chicago plants, on 31st street in the Little Village neighborhood and on 110th street in the Pullman neighborhood, produce the Keebler brand cones and pie crusts as well as Kellogg’s fruity snacks. Kellogg’s declined to disclose the number of workers at the two plants.

The transaction also will include production facilities in Washington, Georgia and Kentucky.

The deal extends Ferrero’s reach into new segments like sweet biscuits and fruit snacks, said Jared Koerten, head of packaged food at Euromonitor. The company, he said, is “quickly emerging as a new powerhouse in U.S. snacks.”

“Similar to the Nestle deal, Ferrero is adding iconic brands with a long history in the U.S. that haven’t necessarily received the necessary attention or investment needed to compete in the market,” Koerten said in an email. “Ferrero will aim to revive these brands and breathe new life into these offerings.”

Products included in the deal are Keebler, Mother’s, Famous Amos, Murray, fruit and fruit-flavored snacks, pie crusts, and cookies made for the Girl Scouts. In 2018, these product lines recorded sales of nearly $900 million, Kellogg said.

Kellogg will continue to own the rest of its North American snacking business, which includes crackers, salty snacks and toaster pastry brands. "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,” Steve Cahillane, Kellogg’s chairman and CEO, said in a news release.

The cash transaction is expected to close by the end of July.

Via ChicagoTribune

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