Kellogg’s, the American multinational food-manufacturing company, announced plans to divest its Keebler cookie brand as well as other brands, to Ferrero Group for $ 1.3 billion. Products included in the deal include Keebler, Mother’s, Famous Amos, Murray, fruit and fruit-flavored snacks, pie crusts, and cookies made for the Girl Scouts. The deal also includes sales of production facilities in Louisville, as well as in Augusta, Chicago, Allyn and Florence. The company will however retain the rest of its North American snacking businesses, including its snacks, crackers and toaster pastries brands.

According to Kellogg’s, last year, their businesses recorded net sales of nearly $900 million and operating profit of about $75 million. Assuming the cash proceeds are used only to reduce outstanding debt, the transaction is expected to be less than 5 percent dilutive to Kellogg’s projected 2019 currency-neutral adjusted earnings per share.

“This divestiture is yet another action we have taken to reshape and focus our portfolio, which will lead to reduced complexity, more targeted investment, and better growth. Divesting these great brands wasn't an easy decision, but we are pleased that they are transitioning to an outstanding company with a portfolio in which they will receive the focus and resources to grow,” Steve Cahillane, Kellogg's chairman and CEO, said in a news release.

Ferrero, whose Ferrara Candy Co. is based in the Chicago area, is best known as the maker of Butterfinger, SweeTarts, Lemonhead candies and Brach’s, Trolli, and was founded in 1908. Ferrero Group also owns Chicago-based Ferrara Candy Co., which it purchased in 2017. The company now employs more than 4,000 people. Ferrero also owns Nutella and Fannie May chocolates, as well as Nutella and Fannie May chocolates.

The purchased Kellogg’s business will be run out of Ferrara’s Chicago offices. “Once the transaction closes, Ferrara will manage the acquired brand portfolio while working collaboratively with Ferrero to leverage the capabilities of the broader Ferrero ecosystem,” said Ferrara spokeswoman Sarah Kittel in an emailed statement. Evercore was the lead advisor to Kellogg on the transaction, with Goldman Sachs acting as co-advisor. Wachtell, Lipton, Rosen & Katz acted as legal counsel. The cash transaction is expected to close by the end of July.

According to TechSci research, the deal with Kellogg’s extends Ferrero’s reach into new segments like fruit snacks and sweet biscuits. Like the Nestle deal, Ferrero is adding iconic brands, which haven’t received the required investments to compete in the market. Ferrero is expected to quickly emerge as a new powerhouse in the US and the global snack industry.

According to a report published by TechSci Research, “India Breakfast Cereal Market By Product Type (Hot Cereal & Ready to Eat Cereal), By Pricing (USD0.30, USD0.30-0.75, etc.), By Pack Size (251-500gm, 101-250gm, etc.), By Distribution Channel, By City, Competition, Forecast & Opportunities, 2013-2023”, India breakfast cereal market stood at $ 283 million in 2017 and is projected to grow at a CAGR of more than 17% to reach $ 751 million by 2023. Anticipated growth in the market can be attributed to increasing urban population and growing corporate culture, resulting in rising demand for breakfast cereals. Moreover, rising demand for convenient food options due to busy lifestyle and increasing disposable income is further pushing demand for breakfast cereals.

According to another report published by TechSci Research, “India Food For Diabetics Market By Product Type (Baked Products, Beverages, Confectionery, Ice Cream, Dairy Products & Breakfast Cereals), By Distribution Channel (Grocery Stores, Online & Others), Competition Forecast & Opportunities, 2013 – 2023”, India food for diabetics market is projected to grow from $ 567 million in 2017 to $ 1.1 billion by 2023, exhibiting a CAGR of over 12% during the forecast period, on account of increasing number of people with diabetes in the country coupled with rising consumer awareness. Expected growth in the market can also be attributed to rising population of health-conscious people, expanding product portfolio of food for diabetics and increasing awareness about the availability and benefits of food products suitable for diabetics.