Shares in the US maker of Kellogg’s Corn Flakes have soared by more than 50% after reports that chocolate giant Ferrero is close to buying the firm for about $3bn (£2.2bn).
A takeover deal for WK Kellogg, which makes the Fruit Loops and Rice Krispies breakfast cereals for the North American market, could come as soon as this week, the Wall Street Journal and Financial Times reported.
The Italian owner of the Ferrero Rocher, Kinder and TicTac brands has been expanding in recent years, buying Nestle’s confectionery business and several other food firms.
WK Kellogg and Ferrero did not immediately respond to BBC requests for comment.
The deal could be worth double WK Kellogg’s $1.5bn stock market value when ordinary trading ended on 9 July.
It would see Ferrero taking a dominant position in the US breakfast cereal market.
Founded in 1946, the Italian firm is one biggest players in the chocolate market, with more than 30 brands sold globally.
WK Kellogg has been struggling financially in recent years and has more than $500m of debt.
In 2023, the US breakfast cereals operation was split off from its former parent company’s international and snacks business, which was renamed Kellanova.
The following year, Kellanova, which makes Pringles crisps and Pop Tarts, was bought by confectionery giant Mars for $36bn.
Convenience food firms are facing major challenges as customers shift to healthier options, which has forced them to change the way they operate.
Companies have also seen their costs rise, which has forced some firms to put up their prices.
The industry has also come under pressure from the Trump administration, which has targeted artificial colouring in brands like Fruit Loops as part of its “Make America Healthy Again” campaign.
Kellogg has said it will remove the synthetic colours from cereals eaten in schools by the 2026-27 school year. But it has not yet set a timeline for taking them out of cereals sold to the general public.
The company’s founder, Will Keith Kellogg, is widely considered to be the inventor of corn flakes.