Kellogg nears deal to sell Keebler and Famous Amos to Nutella owner Ferrero

Daniel Acker | Bloomberg | Getty Images

A box of Kellogg’s Famous Amos brand cookies is arranged for a photograph in Tiskilwa, Illinois.

Kellogg is nearing a deal to sell its Keebler, Famous Amos and fruit snacks businesses to Nutella-owner Ferrero for between $1 billion and $1.5 billion, people familiar with the situation tell CNBC.

An announcement could come as soon as Monday, the people said, requesting anonymity because the information is confidential.

Kellogg announced the sale of its cookie brands last year. Other brands up for sale include Murray and Mother’s cookies and Stretch Island fruit snacks.

The sale comes as Kellogg is paring back its portfolio to focus on brands it can revive.

“We need to make strategic choices about our business and these brands have had difficulty competing for resources and investments within our portfolio,” Kellogg CEO Steve Cahillane said in a statement last year, when announcing the planned divestitures.

Kellogg executives have pointed to Pringles, Cheez-Its and Rice Krispies Treats as brands it can revive with innovation and single-serve options.

The Corn Flakes-owner acquired Keebler in 2001 for $4.4 billion. At the time, part of its draw was the cookie brand’s “direct-store delivery” platform, through which employees place the company’s own products in stores, rather than ship from warehouses. So-called DSD gives a food company more control over ensuring proper display in grocery and convenience stores. But as in-store sales of products like cookies have fallen, it is less economical. Kellogg has since dropped DSD distribution.

Ferrero, which was founded in Italy as a family business in 1946, has been on an acquisition spree over the past two years. Other deals have included its $1-billion acquisition of Ferrara Candy Company, the U.S. owner of Red Hots and Now & Later candies. The deal gave Ferrero the infrastructure to further expand in the U.S.

Kellogg and Ferrero did not immediately respond to requests for comment.

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