The parent company of Oakbrook Terrace-based Ferrera Candy is acquiring the cookies and fruit snack brands of the Kellogg Co. for $1.3 billion.
Italian company Ferrero SpA, the maker of Nutella spread, will acquire the Kellogg brands, including Keebler and Famous Amos, as the cereal maker refocuses on the fast-growing parts of its business.
The all-cash transaction is expected to close by the end of July, the companies said Monday.
"Divesting these great brands wasn't an easy decision," Kellogg CEO Steve Cahillane said in a statement. It "will lead to reduced complexity, more targeted investment, and better growth."
Ferrero has been on an acquisition spree over the years. It acquired Ferrera Candy, the maker of Lemnonheads, Brach's and Chuckles, in 2017 and last year agreed to buy Nestle's U.S. candy business, owner of the Butterfinger and Baby Ruth brands, for $2.8 billion. The company also was said to be among suitors expressing early interest in buying international and fresh food businesses being sold by Campbell.
Kellogg, meanwhile, has been seeking to simplify its corporate structure as it struggles to ignite growth in its U.S. cereal and snacks businesses. Kellogg announced last year that it was looking for buyers for the snacks businesses as part of its strategic plan.
Since Cahillane took Kellogg's reins in 2017, the Battle Creek, Michigan-based packaged-food maker has shifted its priority to increasing sales, instead of cutting costs. The goal has become tougher to achieve as consumers move away from packaged food and cereal has lost popularity with Americans.
In an interview in January, he said divesting Keebler "would take a big portion of the sales out of our portfolio, but its sales that are declining replaced by sales that are growing."
Kellogg slid 2.4 percent to $56.02 in trading Monday. Ferrero is privately owned.
Kellogg isn't alone in seeking to lighten its portfolio. Fellow packaged-food giants are trying to shed lethargic brands in a bid to maximize sales and profit. General Mills has said it wants to divest about 5 percent of its portfolio. Campbell Soup also wants to sell parts of its business.
• Daily Herald staff contributed to this report.