Italian Billionaire's Latest Business Venture: The 21st Acquisition of Kellogg Company
In a significant move that promises to reshape the confectionery landscape, Ferrero, the Italian candy maker renowned for brands like Nutella, has announced its acquisition of WK Kellogg, the cereal maker behind iconic brands such as Froot Loops and Corn Flakes, for $3.1 billion.
The deal, announced on Thursday, is expected to bolster Ferrero's bargaining power with retailers and grow its sales by more than 10%. This strategic move comes as part of Giovanni Ferrero's ambitious plan, revealed in 2018, to double the company's size over ten years by increasing sales by 7.33% each year.
Giovanni Ferrero, 60, who became the sole leader of Ferrero in 2015, owns 75% of the company and is worth an estimated $41.2 billion. Under his guidance, Ferrero has transformed from a family-owned business into a global confectionery powerhouse, particularly through strategic acquisitions in the U.S.
Since 2015, Ferrero has made at least 21 acquisitions in nine countries, with eight deals in the U.S. since 2017. Notable acquisitions include the U.S. candy company Fannie May in 2016, the British chocolate brand Thorntons in 2017, and Nestlé's U.S. confectionery business, which included brands like Butterfinger, BabyRuth, and Crunch, in 2018.
The tie-up with WK Kellogg will diversify Ferrero beyond its core confectionery and snacking fare to include WK's domestic cereal mix. This expansion is expected to position Ferrero to rival Mars' snacking business in terms of revenue.
While 60% of Ferrero products in the U.S. contain synthetic dyes, according to a study by the George Institute for Global Health, the company has been actively working to diversify its supply of key ingredients. This includes investing in research grants to make hazelnut farming more efficient in Oregon.
Since 2015, Ferrero nearly doubled its revenues to $20.4 billion and nearly doubled its EBITDA (earnings before interest, tax, depreciation and amortization) from $1.6 billion in 2015 to $3 billion. The company has spent more than $13 billion buying up at least 21 companies in nine countries in the past 10 years.
Giovanni Ferrero spoke to Forbes in a rare interview in 2018 from Ferrero's original factory in Alba, expressing his vision for the company's future. As executive chairman and CEO, he has steered Ferrero towards a promising future, with a focus on strategic acquisitions to broaden product offerings and geographies.
For a precise and complete timeline, including smaller or more recent deals, further detailed industry reports or official Ferrero communications would be needed. However, this overview provides a concise look at significant acquisitions by Ferrero under Giovanni Ferrero's leadership since 2015.
Despite the Trump administration not implementing any binding regulations that would force food makers to abandon artificial colors, Ferrero's growth trajectory suggests that it is well on its way to meeting its ambitious targets. The acquisition of WK Kellogg marks a significant step in this journey, setting the stage for Ferrero to continue its global expansion.
- As a result of this acquisition, Ferrero, being an entrepreneur in the confectionery industry, is poised to compete with Mars' snacking business in terms of revenue, and potentially expand further through investments in real-estate and business finance.
- With the acquisition of WK Kellogg, Ferrero, under the guidance of billionaire Giovanni Ferrero, is diversifying beyond confectionery and snacking, introducing cereal products, such as Froot Loops and Corn Flakes, to its product portfolio.
- Giovanni Ferrero, an entrepreneur with a net worth exceeding $41.2 billion, has been actively acquiring various companies like Nutella, Fannie May, Thorntons, and Nestlé's U.S. confectionery business, strategically growing Ferrero's size and expanding its presence in the global confectionery market.
