Sweets & Confectionery

Ferrero Submits Final Bid for Kellogg’s Cookies

Although they are not the only contenders in the deal, Ferrero and Hostess are reportedly leading the pack to purchase these legacy brands. The deal is valued at $1.5 billion

Of the three well-placed initial offers for Kellogg’s cookies and fruit snacks, only two remain. B&G, a serial acquirer with a track record of turning brands’ fortunes around, has dropped out of the race. The price tag for this deal also has Hostess Brands, whose market cap is $1.2 billion, getting creative with purchasing possibilities. Both Hostess and Italy’s confectionery giant Ferrero are eyeing the territory Kellogg’s is ceding as they look to push deeper into the sweets and treats market. Hostess already has decades of experience marketing sweets with its Twinkies and Ho-Hos brands, while Ferrero — the longtime owner of Nutella — became the third-largest confectionery company in the US when it purchased Nestlé’s US candy business for $2.8 billion last year.

HOW FERRERO COULD BENEFIT FROM KELLOGG’S COOKIES AND SNACKS

While Kellogg’s is looking to jettison cookies and snacks, Ferrero could benefit from the positioning it offers. Given the global nature of Ferrero and its products, the Keebler acquisition would likely expand its USA footprint for its existing products, while at the same time potentially taking Keebler’s brands into global markets it predominantly occupies,” said Jonathan Treiber, CEO of offer management software platform Revtrax.

NEW STRATEGIES FOR CONFECTIONERY

Kellogg is not alone in focusing on core breakfast while looking to jettison cookies and snacks. Campbell Soup is shedding its Arnott’s business as it works to pay down the debt left in the wake of its $6.2 billion acquisition of Snyder’s-Lance last year. Kraft Heinz is considering a sale of its Breakstone’s and Maxwell House brands. Likewise, Conagra, which acquired Pinnacle Foods last summer, is exploring divestitures, and recently completed the sale of Wesson Oil to Canadian agribusiness Richardson International. If mashups of these brands become a part of the strategy to generate demand, there could be some delicious combinations in store, like Famous Amos candy bars, Famous Amos Twinkies, Butterfinger-flavored Keebler cookies, or a Nutella spread with Famous Amos cookie crumbles.

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