Shares of WK Kellogg Co. (NYSE: KLG) jumped more than 47% in afterhours trading on Wednesday following reports that Italian confectionery giant Ferrero is close to acquiring the US cereal maker for approximately $3 billion.
According to sources cited by The Wall Street Journal, the deal could be finalized as soon as this week. WK Kellogg, the maker of iconic brands such as Froot Loops, Frosted Flakes, and Rice Krispies, currently has a market capitalization near $1.5 billion, with an additional $500 million in debt.
The acquisition would mark another strategic move by Ferrero as it continues to expand its footprint in the US market. The Italian company has recently acquired Nestlé’s US chocolate business and Wells Enterprises, known for its Blue Bunny ice cream brand.
Investors responded enthusiastically to the news, sending Kellogg shares sharply higher after the market closed.