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The Drum

Nutella parent Ferrero preps Kellogg’s brand acquisitions

Nutella parent Ferrero spreads itself out with Kellogg’s acquisitions

Kellogg’s is closing in on the sale of cookie brands Keebler and Famous Amos together with its Stretch Island fruit snacks businesses to Ferrero for up to $1.5bn.

CNBC cites people close to the deal in suggesting that a formal announcement could be made later today as Kellogg’s makes good on a pledge made last year to refocus its business.

The Nutella owner saw off competition from Hostess Brands to wrest control of the assets, part of a wider strategy by the Italian confectionery producer to acquire neglected brands in order to fast track its own expansion in new markets.

Kellogg’s acquired Keebler back in 2001 for $4.4bn, attracted by its ‘direct-store-delivery’ model in which employees placed cookies in the store directly rather than ship from warehouses. This gave the Kellogg’s greater control of in-store displays but latterly proved uneconomic as sales fell.

Kellogg's has been facing headwinds in the UK where politicians have grown increasingly vocal in calling for a ban on cartoon mascots for high sugar cereals.